Govt announces steps to stabilise fuel prices in Brazil

Brazil on Wednesday announced a new package of measures to reduce rising fuel prices caused by the war in the Middle East.

The move comes ahead of elections in October, which analysts predict will be tight.

The government of President Luiz Inacio Lula da Silva announced subsidies for gasoline, which had been left out of an initial price-mitigation package in April, as well as for diesel.

Eighty-year-old veteran leftist Lula is running for a fourth term in office.

Polls show he faces stiff competition from his main rival, senator Flavio Bolsonaro, son of far-right former president Jair Bolsonaro, who is in jail for an attempted coup attempt.

The pro-government camp is therefore looking for anything that might help its cause.

Brazilian gas stations have seen skyrocketing prices ever since the outbreak of the US-Israel war against Iran on 28 February.

But prices have eased slightly recently, according to authorities.

“The situation is still complex,” planning and budget minister Bruno Moretti told a press conference in Brasília.

“That requires us to constantly update our strategy for mitigating the impacts of the war on fuel prices and on the population,” he said.

The latest measures would have no fiscal impact, according to the minister.

Brazil, a net crude exporter according to the International Energy Agency (IEA), is relatively more insulated to external petroleum price shocks compared to countries that rely on imports.