Brazil’s Petrobras board approves joining diesel subsidy program

On September 19, Brazil's state-owned oil company Petrobras announced that its board had agreed to join a government subsidy program for diesel oil producers. The subsidy will provide 1.00 real ($0.19) per liter of diesel for 30 days, with the possibility of extension for an additional 30 days. This subsidy can be combined with an existing subsidy of 1.12 reais per liter.

Earlier in the week, Petrobras raised diesel prices to distributors by an average of 1 real per liter while offering a matching discount. Despite these price adjustments, Petrobras' prices to distributors have remained unchanged, allowing the company to take advantage of the subsidy.

Petrobras reported receiving 448 million reais in payments from a gasoline subsidy program, which was based on sales between July 16-31. In total, accumulated subsidies for diesel, gasoline, and LPG programs have reached 9.9 billion reais.

Since the beginning of the Iran war, Brazilian President Luiz Inacio Lula da Silva has been working to mitigate the impact of higher oil prices before the October presidential election. Lula aims to secure a fourth non-consecutive term in office.