By Brazil Stock Guide – Brazil’s Federal Regional Court of the 2nd Region (TRF-2) upheld an injunction blocking a 12% tax on oil exports, rejecting an appeal from the federal government and maintaining a setback for efforts to fund fuel subsidies through the measure.
In a ruling issued Thursday (9), Judge Carmen Silva Lima de Arruda said the government failed to demonstrate “immediate and irreversible damage” that would justify overturning the lower court’s decision.
The dispute stems from a provisional measure (MP 1.340) introduced by the federal government to impose a levy on crude oil exports, with proceeds earmarked for fuel price support programs.
Earlier, on Tuesday (7), a federal court in Rio de Janeiro granted an injunction in favor of major oil companies including TotalEnergies SE (TTE FP), Repsol SA (REP SM), China Petroleum & Chemical Corp (600028 CH), Galp Energia SGPS SA (GALP PL), Shell Plc (SHEL LN) and Equinor ASA (EQNR NO), suspending the tax.
The government subsequently appealed the decision, arguing fiscal urgency. However, the appellate court found that the arguments presented were insufficient to justify immediate reversal.
As a result, the suspension of the export tax remains in place until a final judgment is issued by TRF-2, leaving the government’s strategy to finance fuel subsidies through the levy on hold.
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