Brazilian President Lula Abolishes Gasoline Tax in Pre-Election Move to Curb Fuel Prices

• The tax abolition is implemented just two weeks before the runoff election.
• This measure seeks to address escalating fuel prices driven by global oil market volatility.

Updated 2 min 54 sec ago

Arab News Pakistan

October 10, 2026 18:45

SAO PAULO: The Brazilian government announced on Friday that it will temporarily scrap gasoline taxes, two weeks prior to the runoff election between incumbent President Luiz Inacio Lula da Silva and right-wing challenger Flavio Bolsonaro. Lula, who is pursuing a fourth term, aims to mitigate rising fuel costs amid a global surge in oil prices exacerbated by the conflict in the Middle East. The gasoline tax, previously set at 0.89 reais ($0.18) per liter, will be waived for 30 days, according to official sources. Additionally, the announcement expands subsidies for diesel importers, which is the primary fuel for Brazil’s freight transport sector. “The goal is to maintain import viability during a critical supply period,” stated the presidency. The fiscal impact of these tax exemptions will be compensated by Brazil’s “extraordinary revenues” from oil exports. The October 25 runoff election was necessitated after Lula secured 45 percent of the vote in the first round, while Bolsonaro obtained 47 percent. Bolsonaro labeled his opponent “irresponsible,” cautioning that Lula was burdening consumers with a “bomb” and warning of potential diesel price increases post-election. Bolsonaro, the eldest son of former far-right president Jair Bolsonaro, has consistently criticized the administration for its inability to control living costs. According to the statistics authority, inflation in Brazil rose by 0.82 percent in September.

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