Brazil's average diesel price to distributors climbed 40% in early March to R$ 5.36 per liter following intensified US and Israeli attacks on Iran, per ANP data. Pump prices rose 20% by late March. Building on the March 12 federal tax exemption, the Lula administration is pressuring fuel stakeholders to limit consumer pass-throughs and fast-tracking a diesel subsidy ahead of October elections.
The ANP reported distributor diesel prices at R$ 5.36 per liter for the week of March 15, up sharply from R$ 3.85 the prior week before the Iran war escalation. Key drivers include an 11% Petrobras refinery hike, higher private import costs, and increases at Mubadala-controlled Refinaria de Mataripe. Pure diesel comprises about half the pump price, with the balance from biodiesel, taxes, and margins—despite the recent federal tax exemption announced by President Lula on March 12.
Pump prices increased 20% up to late March, according to ANP figures. The government has intensified scrutiny on station owners and distributors via ANP, the Justice Ministry, and Procon to curb pass-throughs to consumers, especially pre-election. A proposed diesel subsidy, the primary counter to war impacts, awaits ANP regulation; its board was set to discuss rules on March 26. Petrobras and Refinaria de Mataripe pledged compliance, while importers await details. The initial R$ 0.32 per liter subsidy is deemed inadequate for international price gaps, with plans to elevate it to R$ 1.20 pending state approval.
ANP's technical note highlighted an 'exceptional supply risk' from reduced imports, prompting eased stock rules and mandated Petrobras auctions. On March 26, Petrobras released suspended volumes as extra contract quotas. Abicom president Sérgio Araújo noted: 'The situation is much better than last week... far from desperate.' Sector forecasts indicate stronger April imports, reducing shortage risks.
