By Brazil Stock Guide – Brazil’s oil and gas industry group IBP raised concerns over government measures aimed at curbing fuel price pressures, warning that new policies could undermine competitiveness and investment in the sector.
The institute said the global oil market is facing a supply squeeze driven by geopolitical tensions in the Middle East, pushing crude prices higher and creating a challenging environment for policymakers.
At the center of the criticism is Provisional Measure No. 1,340/2026, which introduces a 12% export tax on crude oil. According to IBP, the lack of a defined duration and the unexpected nature of the measure increase regulatory uncertainty and weaken Brazil’s position as a competitive exporter.
The group argued that existing mechanisms already capture windfall gains, including special participation fees, higher royalty revenues and increased government take under production-sharing agreements. Adding a new export tax effectively creates double taxation and risks deterring long-term capital inflows into the sector.
Frequent tax changes, the institute said, erode the predictability required for capital-intensive industries, with potential consequences for future output, job creation and federal revenue.
On diesel policy, IBP acknowledged that the government’s move to eliminate PIS and Cofins taxes on imports and commercialization could help ease price pressures at the pump. However, it warned that failing to extend the exemption to the crude input used in refining could lead to an accumulation of tax credits for private refiners.
The group also highlighted the role of state-level taxes, noting that ICMS rates are, on average, three times higher than federal levies, limiting the overall impact of the federal relief measures.
IBP cautioned against proposals to grant tax breaks only to imported fuels, saying such an approach would create a competitive imbalance and discourage domestic production at a critical moment for the industry.
Regarding fuel subsidies, the institute said the regional reference price to be set by ANP should align with import parity pricing. Without that benchmark, the program may fail to deliver consistent results across the country.
Leave a Reply