What is the scale and duration of Brazil's new gasoline and diesel subsidy program announced by President Lula?

The Brazilian government plans to spend up to 2.9 billion reais ($580 million) per month to subsidize both domestically produced and imported gasoline and diesel; the program was introduced via a provisional decree, lasts two months initially, and may be extended if necessary.

Why did the Lula administration bypass Congress and use a provisional decree to implement the fuel subsidies?

Facing delays in congressional negotiations — where lawmakers sought to broaden the original proposal (which aimed to use oil-related revenue to offset tax relief) to include incentives for sectors like agribusiness — the administration opted for a provisional measure to ensure immediate implementation.

Brazil to Subsidize Gasoline as Lula Ramps Up Election Stimulus

May 13, 2026

Brazil announced up to $580 million monthly fuel subsidies to mitigate inflation impacts from the Iran conflict and support President Lula before October elections. The policy covers gasoline, diesel, and biodiesel, involving state-owned Petrobras and potential extensions beyond two months.

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