Brazil scraps gasoline tax before runoff election

Brazil's government announced on October 9 that it would temporarily scrap a gasoline tax, two weeks before President Luiz Inacio Lula da Silva faces right-wing challenger Flavio Bolsonaro in a runoff election.

The tax, set at 0.89 reais ($0.18) per liter, will be waived for 30 days, the government said. The measure also expands subsidies for importers of diesel, the main fuel used in Brazil's freight transport.

Lula is seeking a fourth term and is trying to contain rising fuel prices during a global rise in oil prices linked by the government to the war in the Middle East.

“The objective is to ensure that imports remain viable at a critical moment for supply,” the presidency said. It said the fiscal impact of the exemptions would be offset by Brazil's extraordinary revenues from oil exports.

The October 25 runoff was set after Lula won 45% of the first-round vote and Bolsonaro won 47%.

Bolsonaro called Lula “irresponsible” and warned that the president was placing a “bomb” on consumers' laps. He said diesel prices could rise after the election.

Brazil's statistics authority said on October 9 that inflation rose by 0.82% in September.