Brazil Cuts Gasoline Tax to R$0.16 a Litre, Ends Ethanol Tax and Pays R$1 Diesel Subsidy

Brazil has introduced new quality requirements for mineral fuels, mineral oils, and mineral waxes through Decree No. 13.096 and the National Sustainable Aviation Fuel Program regulation under Decree No. 13.094

Brazil has cut fuel taxes and launched a diesel subsidy as oil prices climb amid global supply disruptions, introducing the first major regulatory changes to its fuel market in 2026. The measures, announced on 9 September, reduce taxes on gasoline and ethanol while offering temporary financial support to diesel producers and importers. The changes affect every litre sold in the country, from road fuel to aviation kerosene, and will remain in place until the government signals otherwise.

The new rules target three products: gasoline, ethanol and diesel. Gasoline taxes fall by R$0.63 per litre, ethanol taxes are eliminated entirely, and diesel suppliers receive a R$1.00 per litre subsidy for road-use fuel. The adjustments come after months of rising international oil prices, driven by geopolitical tensions in the Middle East. While the measures are designed to shield consumers from price spikes, they also introduce new compliance steps for fuel traders, refiners and distributors.

The tax cuts and who gains

Gasoline taxes drop to R$0.16 per litre from the previous rate, a reduction of R$0.63¹. Ethanol, which had been taxed at R$0.19 per litre, now carries no federal levies at all. The cuts replace an earlier subsidy programme that expired on the same day, meaning the delivered cost of both fuels should fall immediately. The government said the changes were necessary to prevent domestic prices from rising in line with global benchmarks, which have climbed by more than 15% since the start of the year.

Diesel is treated differently. Instead of cutting taxes, the government has authorised a temporary subsidy of R$1.00 per litre for road-use diesel¹. The subsidy is paid directly to producers and importers, who must pass the full amount on to retailers and record the discount on every invoice. The National Petroleum Agency (ANP) will verify eligibility, monitor prices and administer payments. The scheme is explicitly tied to “instability in fuel supply caused by geopolitical conflicts,” the government said in a statement, and will remain in place only as long as those conditions persist.

Who must comply and how

Fuel suppliers must now navigate two separate regimes. For gasoline and ethanol, the tax cuts are automatic; no new paperwork is required beyond the usual tax filings. For diesel, however, every participant must apply to the ANP for accreditation. Only companies that have already received preliminary approval from both the ANP and the Ministry of Mines and Energy can join the scheme². Once accredited, they must deduct the subsidy from the wholesale price and show the reduction on every invoice. Failure to do so will disqualify them from future payments and may trigger penalties.

The ANP has published a list of required documents, including proof of prior technical and fiscal approval. The agency will also conduct random audits of invoices and retail prices to ensure the subsidy is being passed on. Diesel suppliers must therefore maintain detailed records of every litre sold, the price before and after the subsidy, and the final retail price. The rules do not specify how often audits will occur, but the ANP said it would publish guidance within 30 days.

The aviation fuel programme and quality rules

Alongside the tax and subsidy measures, Brazil has introduced new quality standards for aviation fuels under Decree No. 13.094. The decree establishes the National Sustainable Aviation Fuel Programme, which sets minimum blending requirements and sustainability criteria for jet fuel. Starting in 2027, all aviation fuel sold in Brazil must contain at least 1% sustainable aviation fuel (SAF), rising to 2% in 2028 and 5% in 2030². The programme also creates a certification system for SAF producers, requiring them to demonstrate that their feedstocks meet greenhouse-gas reduction thresholds.

The quality rules extend beyond aviation. Decree No. 13.096 tightens specifications for mineral oils, waxes and lubricants, aligning them with international standards. Lubricants must now meet the IATF 16949 quality management system, a requirement already in place for municipal procurement in São Paulo state³. The decree also introduces new testing protocols for sulphur content, flash point and viscosity. Importers of lubricants must now provide a certificate of conformity for every shipment, issued by an accredited laboratory. The new standards take effect on 1 January 2027, giving suppliers four months to adjust their supply chains.

What the changes leave unchanged

The tax cuts and subsidies do not alter Brazil’s mandatory ethanol blending rules. Gasoline must still contain 27% anhydrous ethanol, a requirement set by CNPE Resolution No. 9 in April⁴. The resolution also directs the ANP to study ways to prevent ethanol intended for fuel from being diverted into alcoholic beverages. Similarly, the biodiesel mandate remains at 14% for road diesel, with at least 80% of that volume required to come from producers holding the Social Biofuel Seal⁴. The seal is awarded to companies that source feedstocks from family farmers, ensuring the programme supports rural livelihoods.

The new measures also leave intact Brazil’s existing fuel fraud prevention framework. CNPE Resolution No. 10, adopted in July, strengthens the ANP’s powers to investigate and penalise adulteration⁴. The resolution requires fuel retailers to install tamper-proof meters and submit monthly sales reports to the ANP. It also authorises the agency to conduct unannounced inspections and seize suspect shipments. While the tax cuts and subsidies may reduce the incentive to adulterate fuels, the fraud prevention rules remain fully enforceable.

The next steps and what they signal

The diesel subsidy is the most time-sensitive element. The first payment period runs until 31 December 2026, but the government can extend, adjust or cancel it at any time¹. The Ministry of Finance will publish the exact payment schedule and any changes to the subsidy rate. Fuel traders should monitor the ANP’s website for updates, as the agency will post accreditation lists and audit findings. The tax cuts on gasoline and ethanol, by contrast, are permanent unless reversed by a future decree.

The measures signal a shift in Brazil’s fuel policy. Previous interventions relied on price controls and import tariffs; the current approach uses targeted tax cuts and direct subsidies. The government said the new tools were chosen for their speed and flexibility, allowing it to respond quickly to global price swings. However, the changes also increase the administrative burden on fuel suppliers, who must now navigate multiple compliance regimes simultaneously. For importers, the message is clear: the cost savings from lower taxes may be offset by the need to invest in new testing, certification and record-keeping systems.

Sources

1. ↩ Federal Government Implements New Fuel Measures Amid Oil Price Increases https://www.gov.br/planejamento/pt-br/assuntos/noticias-defeso-eleitoral-2026/governo-federal-adota-novas-medidas-para-combustiveis-apos-novos-aumentos-do-petroleo
2. ↩ WTO TBT notification 26-04262 — Brazil https://members.wto.org/crnattachments/2026/TBT/BRA/26_04262_00_e.pdf
3. ↩ Taiaçu Municipal Government Document https://www.taiacu.sp.gov.br/files/biddings/505/6a834dc078fcb.pdf
4. ↩ 2026 CNPE Resolutions: Guidelines to Combat Fuel Fraud and Adulteration https://www.gov.br/mme/pt-br/assuntos/conselhos-e-comites/cnpe/resolucoes-do-cnpe/2026