Brazil and India Implement New Measures to Control Fuel Prices Amid Global Oil Market Disruptions

Global oil market disruptions caused by the closure of the Strait of Hormuz continue to exert pressure on the economies of major fuel-consuming countries. This situation has prompted governments to adjust their policies to address price fluctuations and mitigate inflationary pressures.

Brazil has extended its emergency measures to support diesel fuel until the end of July, India has reduced customs duties on fuel exports, and Austria has relaxed its gasoline price control measures that were initially aimed at curbing inflation and stabilizing markets.

Brazil's government extended the emergency measures for two additional months to contain the rising fuel prices resulting from volatility in the global oil market. These measures will remain effective until July 31.

An official statement indicated that this decision continues the government actions adopted in response to the disturbances in the global oil market linked to events in the Middle East.

The measures include providing a subsidy of 1.12 Brazilian reais, approximately 20 US cents, per liter of diesel to local refining companies and domestic importers, fully funded by federal government resources.

Additionally, the Ministry of Finance established a compensation mechanism for diesel producers and importers to replace the temporary exemption from federal taxes that was valid until May 31.

India announced a reduction in customs duties on exports of gasoline, diesel, and aviation fuel for a period of two weeks starting June 1.

The Indian government stated in a release that the export duty on gasoline was set at 1.5 rupees (0.0158 US dollars) per liter, while the duty on diesel was fixed at 13.5 rupees per liter. The export duty on aviation fuel was determined at 9.5 rupees per liter.

These rates are reviewed every two weeks and are based on the average international prices of crude oil, gasoline, diesel, and aviation fuel since the most recent review.

Meanwhile, the Austrian coalition government announced on Saturday that it would reduce the recently introduced "gasoline price brakes," a measure designed to combat inflation by shielding consumers from rising oil prices caused by the conflict with Iran.

This mechanism combines a reduction in retail traders' profit margins with the return of increased value-added tax revenue resulting from higher fuel prices to consumers through a gasoline tax cut. The government is required to determine the size of both components monthly.

Currently, the reduction in profit margins stands at 2.5 euro cents (2.9 US cents) per liter, while the tax reduction is two cents per liter.

The Ministry of Economy stated that the reduction in profit margins will be canceled starting June 1, and the tax cut will be reduced to 1.7 cents per liter.