Brazil Plans State‑Level Diesel Tax Cut

The federal government is looking to reduce the tax that states charge on diesel imports. This move would mean that states lose about 3 billion reais each month, but the central government will pay half of that loss. The idea was first raised during a meeting with state finance leaders and will be discussed again on March 27. Oil prices have risen sharply because of the U. S. –Israel conflict and tensions with Iran. Last week, the federal government already lowered taxes on diesel and promised a subsidy for imported fuel. These steps aim to keep prices from jumping too high, especially before Petrobras releases its own price changes.Brazil relies heavily on road transport for goods movement. Because the country imports around 25 percent of its diesel, any tax change can affect many people. The finance ministry has been watching reports that some companies may be raising prices unfairly when oil costs go up. An agreement was signed with most states to let the National Petroleum Agency track fuel sales invoices in real time. More states can join, but some big ones—Amazonas, Mato Grosso, Alagoas, Santa Catarina, Paraná and São Paulo—have not yet signed. The government wants to make sure the tax relief does not lead to abuse and that fuel remains affordable.