Federal fuel discount fails to reach Brasília pumps as state tax rises in 2027

This is a translation of the original article in Portuguese. Read the original (Português).

The discounts the federal government granted on fuel in October are not showing up at gas stations in Brasília. According to the newspaper Correio da Edição Distrito Federal (the Brazilian newspaper Correio da Edição, covering the Federal District), regular gasoline still sells for an average of R$ 6.38 in the capital, according to the ANP (Brazil’s National Agency of Petroleum, Natural Gas and Biofuels). The fuel retailers’ union, Sindicombustíveis-DF, says part of the benefit granted to distributors did not reach the stations.

On October 9, the government suspended federal taxes on gasoline for 30 days, raising the total benefit to R$ 0.89 per liter. On October 27, the Ministry of Planning and Budget announced a 30-day extension of the diesel subsidy, of R$ 2.12 per liter.

The newspaper Correio da Manhã reports that consumers in Brasília have not noticed price drops after the measures. Station owners blame the distributors, and lawmakers are demanding explanations about where the public money paid as discounts has gone.

The measures were taken to contain the oil price shock caused by the war in Iran. Industry representatives interviewed by the newspapers A Gazeta and O Dia estimate that, without government intervention, fuel would cost about twice as much in the country. In addition to suspending taxes and subsidizing diesel, the government increased processing volumes at Petrobras refineries. Data from Abicom, the association of Brazilian fuel importers, indicate that the state-controlled company sells diesel at 47% of the international price.

While federal relief has not reached consumers, a state tax increase is already scheduled. Confaz, the council that brings together the state finance secretaries, approved on October 27 the agreements updating the ICMS (state value-added tax) on fuels, effective February 1, 2027.

The tax is charged as a fixed amount per liter. For gasoline and anhydrous ethanol, the kind blended into gasoline, it rises from R$ 1.57 to R$ 1.64, an increase of R$ 0.07 per liter. For diesel, it goes from R$ 1.17 to R$ 1.30, a rise of R$ 0.13 per liter. Because diesel powers trucks and buses, the increase is likely to weigh on freight costs and the price of transported goods.

In the Federal District Legislative Chamber, district lawmaker Chico Vigilante filed a legislative decree project to block the ICMS increase. The Federal District government responded that the update follows Complementary Law No. 192/2022 and that the Federal District cannot change the rates on its own, without the other states.

The federal government and the ANP have not yet announced measures to verify whether the discount is being passed along the chain, from refinery to gas station.

Reporting from Correio da Edição Distrito Federal (p. 14, Brasília/DF e nacional), Correio da Manhã (p. 1, Brasília/DF), A Gazeta (p. 5, nacional), O Dia (p. 7, nacional).