March 25, 2026 [Reuters]- Brazil’s government is rolling out a new plan to help states subsidize diesel imports, Finance Minister Dario Durigan announced on Tuesday, amid concerns over fuel supply and high prices due to the U.S.-Israel war on Iran.
The government had earlier this month proposed states scrap the state ICMS tax on diesel imports. The plan announced on Tuesday would be faster to implement, the minister told reporters, because instead of getting a tax cut, importers would receive a direct payment provided in equal parts by the state and federal governments.
Durigan said the state-level ICMS tax on imported diesel is 1.20 reais ($0.2280) per liter, which means the state and federal government would each cover 0.60 reais of the burden through a subsidy. The subsidy would be valid through May and states have until Friday to reply to the proposal, he noted.
The impact of the measure would be the same as that of a direct tax waiver, initially estimated at 3 billion reais a month, Durigan said.
High diesel prices have become a major concern for Brazilian President Luiz Inacio Lula da Silva, who is running for reelection this year. Earlier in March, the government scrapped federal taxes on diesel and imposed a 12% tax on oil exports.
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