Brazil’s Government Extends Fuel Price Relief Ahead of Election

Brazil’s government extended measures to contain rising fuel prices, ensuring continued relief for consumers ahead of the presidential election’s first round on Oct. 4.

The Finance Ministry ordinance ensures that a diesel fuel subsidy totaling 2.12 reais ($0.41) per liter — which was due to expire Saturday — will last at least another 30 days, after provisional measures that began on May 30. The measure doesn’t change the amount of the subsidy, according to a ministry statement Friday.

President Luiz Inácio Lula da Silva announced additional cuts to fuel taxes this month in a bid to shield consumers from the impact of surging oil prices brought on by war between Iran and the US. Those measures also include cuts in gasoline and ethanol taxes.

The government is setting aside 5 billion reais for the fiscal impact of the measures, Planning Minister Bruno Moretti said Thursday.

Read More: Lula Cuts Fuel Taxes as Oil Prices Rise Ahead of Election

Brazil’s government has taken several steps to help consumers since the conflict in the Middle East sparked this year’s runup in oil prices. Higher prices at the pump would pose add risk to Lula’s reelection bid as his campaign is losing momentum.

Petrobras Chief Executive Officer Magda Chambriard said this week that the company can’t react every day to oil price swings under its fuel pricing policy at the risk of losing market share.