By The Rio Times | Created at 2026-10-09 22:21:55 | Updated at 2026-10-09 23:26:49
2 hours ago
Economy: Brazil
Key Facts
—Who. President Luiz Inácio Lula da Silva and the Ministry of Mines and Energy
—What. A new extraordinary credit of R$7.52 billion (about US$1.51 billion) for fuel subsidies, of which 82% goes to road diesel
—Where. Brazil, with effects on fuel prices across the country
—When. Issued on Thursday 8 October 2026 and published on Friday 9 October 2026
—Why it matters. The money continues subsidies created to soften the impact of high international oil prices, days before Brazil’s presidential runoff
—As of. 9 October 2026, 21:05 GMT
Brazil’s government has opened a new extraordinary credit of R$7.52 billion (about US$1.51 billion) to keep paying fuel subsidies. President Luiz Inácio Lula da Silva issued the measure on Thursday 8 October 2026, and it was published on Friday 9 October 2026.
What We Know
The measure is Provisional Measure number 1.395, published in the Diário Oficial da União, Brazil’s official gazette, on Friday 9 October 2026. A provisional measure (medida provisória) is an executive order with force of law that Congress must convert into law within 120 days, or it lapses.
It opens an extraordinary credit of R$7.52 billion (about US$1.51 billion) for fuel subsidies. An extraordinary credit is extra budget authority for urgent and unforeseen spending.
All US$ figures in this article use the RT USD/BRL rate of 4.99 reais per US dollar on 9 October 2026. The credit is for the Ministry of Mines and Energy.
The new money continues payments of subsidies created earlier this year by two other provisional measures. These are MP 1.363/2026 for diesel and MP 1.358/2026 for other oil derivatives.
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Where the Money Goes
Most of the credit goes to diesel. R$6.17 billion (about US$1.24 billion), or 82% of the total, is for subsidies on road diesel production and imports.
The remaining R$1.35 billion (about US$0.27 billion), or 18%, is for other oil products. The funds go to the Ministry of Mines and Energy.
The subsidies it funds were created to contain the effect of high international oil prices, linked to the escalation in the Middle East, on Brazilian fuel prices. CNN Brasil reports the aim as reducing the effects of price rises on the Brazilian market.
A separate package announced in September, with a new diesel subsidy and gasoline and ethanol tax cuts, was put by Agência Brasil at about R$7 billion a month (about US$1.4 billion). That figure covers a different set of measures and is not the cost of this credit.
What Is Not Known
The reports we saw do not state how much the government has spent on fuel subsidies so far this year. Without that total, it is not possible to say how this credit compares with the full bill.
They also do not say how Congress will treat the provisional measure. Lawmakers must vote on it later, and the outcome is open.
Nor do they explain how the spending is treated under Brazil’s fiscal rule. We will report it if the Treasury or the budget authorities publish details.
What It Means for US Readers and Investors
Brazil is a major oil producer, and Petrobras has shares listed in the United States. The subsidy shows how far the government is willing to go to manage fuel prices at home.
Diesel prices matter beyond the pump, because they feed into freight and food costs across a large country. That is why a diesel-heavy credit is relevant for anyone tracking Brazilian inflation or supply chains.
The decree comes as Brazil heads to a presidential runoff on Sunday 25 October 2026. Readers can see how the issue has developed in Lula Extends Brazil’s Diesel Subsidy Eight Days Before the Election.
For the cost side of the story, see Brazil Fuel Subsidy Bill Reaches US$6.2 Billion, Treasury Says Revenue Covers It. Together the two reports show how the subsidy issue has developed before the vote.
Background: Brazil Tax Reform 2026 Replaces Five Taxes With Two VATs.
Frequently Asked Questions
What did Brazil approve on 9 October 2026?
Brazil published Provisional Measure 1.395, which opens an extraordinary credit of R$7.52 billion (about US$1.51 billion) for fuel subsidies. It was issued on Thursday 8 October 2026 by President Lula.
What is an extraordinary credit?
It is extra budget authority for urgent and unforeseen spending. Normally a credit is opened by decree, but this one was opened through a provisional measure.
How is the money split?
R$6.17 billion (about US$1.24 billion), or 82%, is for road diesel production and import subsidies. R$1.35 billion (about US$0.27 billion), or 18%, is for other oil products.
Does Congress still have a say?
Yes, because a provisional measure has force of law at once but Congress must convert it into law within 120 days. The reports we saw do not say how lawmakers will handle it.
