Brazil has significantly increased its diesel purchases from Russia since the beginning of the war in the Middle East, following the suspension of imports from the region. Data from the Comex Stat system, of the Ministry of Development, Industry, Commerce and Services (Mdic), shows that Russia and the United States have become the leading suppliers of fuel to the country in recent months.
In March and April, Brazil imported US$1.76 billion worth of diesel. Of this total, US$1.43 billion came from Russia, equivalent to 81.25% of the country's external purchases of the product. The United States ranks second, with US$112.92 million, or 6.42% of the total.
In April alone, Brazil's dependence on Russian diesel increased further. The country purchased US$924 million worth of diesel from Russia, which accounted for 89.84% of imports during the month. The United States accounted for 10.98% of purchases, while the United Kingdom had a residual share.
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Key figures:
US$1.76 billion in diesel imported in March and April.
81.25% of the total came from Russia.
US$924 million imported from Russia in April alone.
89.84% Russian share in April purchases.
Before the conflict, Brazil still maintained some imports from the Middle East. In March, the country received shipments sent before the escalation of the war, including purchases from the United Arab Emirates and Saudi Arabia.
The figures show a rapid increase in Russian purchases. In February, Brazil imported US$433.22 million worth of diesel from Russia. The value rose to US$505.86 million in March and approached US$1 billion in April.
Measures:
To mitigate the impact of rising diesel prices on consumers and transporters, the federal government announced a series of compensation measures.
In March, a provisional measure released R$10 billion in subsidies for the import and marketing of the fuel. Simultaneously, a decree signed by President Luiz Inácio Lula da Silva eliminated the rates of the Social Integration Program (PIS) and the Contribution for Financing Social Security (Cofins) on diesel.
According to the government, the tax relief should reduce the price by R$0.32 per liter at refineries. The additional subsidy to producers and importers could generate a further reduction of R$0.32 per liter.
The economic team states that the loss of revenue was offset by the increase in revenue from oil royalties, driven by the international appreciation of the barrel.
ICMS Reduction:
In April, the federal government launched a program to encourage states to reduce the ICMS (a state-level tax) on imported diesel. The cost of the measure is shared between the federal government and the state governments.
The estimated reduction is R$1.20 per liter at the pump, with a total cost of R$4 billion over two months. Only Rondônia did not join the agreement.
The government also announced an additional subsidy of R$0.80 per liter for diesel produced in Brazil, with an estimated impact of R$3 billion per month.
Companies that benefit from the subsidy will need to prove that the reduction is passed on to the final consumer.