Economy Ministry Seeks to Limit Bill Containing Subsidies for Diesel and Gasoline

Paulo Guedes sets a limit of US$ 10 billion

After giving in and opening the federal coffers to subsidize fuel prices in an election year, the Ministry of Economy is carefully monitoring the next steps taken by Congress to prevent the bill from getting higher.

The measures agreed so far will have an impact of R$ 42.5 billion (US$ 9 billion) by the end of the year, according to government sources interviewed by Folha.

The amount includes cutting federal taxes on gasoline and ethanol and a transfer of R$ 25.7 billion to states and municipalities to compensate for the reduction to zero of ICMS on diesel and cooking gas.

Behind the scenes, however, technicians are cautious about the prospect of the value growing if governors press for greater compensation. The Federal Executive is already acting to prevent this from happening.

Interlocutors report that, in the internal negotiations, Minister Paulo Guedes (Economy) established a limit of R$ 50 billion (US$ 10 billion) for the set of measures.

Translated by Kiratiana Freelon

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