IBP Statement - Export Tax on Crude Oil and Diesel Relief Measures
In light of the recent measures announced by the Federal Government to contain upward pressure on petroleum product prices resulting from the conflict in the Middle East, the Brazilian Petroleum, Gas and Biofuels Institute (IBP) recognizes the exceptional circumstances currently affecting the global oil market, characterized by significant supply constraints and rising crude oil prices.
However, in the Institute’s assessment, Provisional Measure No. 1,340/2026, which establishes a 12% export tax on crude oil exports, creates regulatory risk and undermines the competitiveness of Brazilian crude oil due to both the absence of a clearly defined duration and the unforeseen nature of the tax.
IBP notes that the current legal framework already includes mechanisms designed to capture extraordinary gains, such as Special Participation payments, increased royalty revenues, and higher government oil-profit shares under production-sharing agreements resulting from elevated crude oil prices. In this context, the export tax effectively constitutes double taxation and may negatively affect the country’s ability to attract long-term investments.
Ad hoc measures creating new taxes undermine the predictability required by capital-intensive industries, directly impacting future production, job creation, and federal government revenues.
The decree establishing diesel subsidies and tax relief, in turn, may help curb upward pressure on retail fuel prices by reducing PIS and COFINS rates on diesel imports and commercialization to zero. However, it is important that the measure also include relief from PIS and COFINS on the portion of crude oil purchases used to produce the tax-exempt diesel, in order to prevent the accumulation of tax credits by private refiners that may prove difficult to recover or offset.
Likewise, it would be important for Brazilian states to adopt complementary measures, as ICMS rates are, on average, three times higher than federal taxes. Tax relief measures should apply to fuels regardless of their origin, whether domestically produced or imported. The proposal recently raised for discussion, which would grant tax relief exclusively to imported products, would create an unsustainable competitive imbalance for domestic producers, discouraging production at a critical moment and raising serious concerns across the sector.
With regard to the subsidy program, it is essential that the Regional Reference Price to be calculated and published by ANP, which will serve as the basis for companies’ access to subsidies, remain aligned with Import Parity Pricing (IPP). Without such alignment, the program will not achieve its intended objectives across the national territory.
IBP emphasizes the importance of ensuring that public policies designed to mitigate the effects of global geopolitical shocks preserve legal certainty and regulatory stability, both of which are essential for Brazil to maintain its strategic position as an oil exporter and secure the replenishment of its reserves. The Institute also underscores the need for all participants in the oil and gas value chain to prioritize efforts aimed at maintaining a continuous and uninterrupted supply of fuels, thereby safeguarding national energy supply security.
