Brazil will spend up to 2.9 billion reais ($580 million) per month on gasoline and diesel subsidies to curb inflation and support President Luiz Inacio Lula da Silva ahead of October's presidential election, Bloomberg reported on Wednesday.
The two-month program, which can be extended if needed, will subsidize both imported and domestically produced fuels.
Since the Iran war began, Brazil has announced as much as 13 billion reais in tax cuts and subsidies across multiple products, including biodiesel, aviation fuel and cooking gas.
Finance Ministry Executive Secretary Rogerio Ceron said the measures do not violate fiscal rules as higher oil prices have boosted tax revenue.
The move also allows Petroleo Brasileiro SA to raise fuel prices after delaying adjustments under a policy aimed at limiting the pass-through of global oil price swings to consumers.