Brazil extends diesel subsidy at current level, citing oil volatility

By Reuters News

BRASÍLIA, Sept 26 (Reuters) - Brazil's finance ministry extended a diesel fuel subsidy, effective on Sunday, citing persistent volatility in international oil and fuel prices, the ministry said in a statement on Saturday.

  • The subsidy began at 1.12 reais ($0.2159) per liter in late May, then rose to 2.12 reais per liter earlier this month as oil prices worsened

  • The original decree behind it expired on Friday, so the new decree takes over on Sunday to keep the full amount in place

  • Planning Minister Bruno Moretti had on Thursday signaled the extension was likely, pending a final decision from President Luiz Inacio Lula da Silva

  • Moretti said that the oil price shock from the Middle East conflict has generated 50 billion reais ($9.64 billion) in extraordinary revenue against 40 billion reais in spending aimed at mitigating the conflict's impact

  • Government aims to remove the benefit once the oil price shock from the Middle East conflict dissipates

  • Brazil votes in the first round of its general election on October 4. Lula faces a close race with his leading right-wing rival, Senator Flavio Bolsonaro

($1 = 5.1868 reais)

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