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Brazil Reportedly Approves Subsidies for Gasoline, Diesel

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The Brazilian government on Wednesday said it will subsidize gasoline and diesel to mitigate the inflationary impact of the Iran war, multiple media outlets reported.

According to a Bloomberg report, citing Planning Minister Bruno Moretti, the government intends to spend up to 2.9 billion reais ($580 million) per month to subsidize both domestically produced and imported gasoline and diesel.

The program was introduced on Wednesday through a directive by President Luiz Inacio Lula da Silva, who is likely to seek re-election later this year. It will run for two months and will be extended if required, the report added.

The direct subsidy will first be provided to gasoline producers and importers through oil regulator ANP. The subsidy is expected to be extended to diesel from June onwards following the expiry of an existing one at the end of May, Reuters reported.

The directive was issued following the stalling of a proposal to slash federal fuel taxes in the Congress, the Reuters report said.

The move is expected to allow Petrobras to increase prices. The state-controlled energy major has delayed price revisions to shield domestic consumers from the international oil price volatility, a separate report from Bloomberg said.

has reached out to Brazil's Ministry of Planning and Budget for comment.

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