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Brazil Senate president indicates voting on proposals to lower fuel prices as oil climbs -Breaking

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© Reuters. Rodrigo Pacheco talks during the session of the Brazilian Senate to elect its president in Brasilia on February 1, 2021. REUTERS/Adriano Machado

BRASILIA, Reuters – Rodrigo Pacheco, president of the Brazilian Senate said Wednesday that bills to reduce rising fuel prices will be up for discussion next week in light of renewed price pressures following Russia’s invasion.

As crude oil prices rose past $110 per barrel, he tweeted, (NYSE:) “More important than ever, we must take steps to prevent fuel prices going up.”

Pacheco mentions one of these projects as a way to stabilize fuel prices. The other alters the ICMS tax calculation rules. The head of the upper chamber said that both projects will be “on next week’s Senate agenda.”

Latin America’s largest economy is experiencing double-digit inflation due to the sharp rise in fuel costs. In order to increase his popularity before the October elections, President Jair Bolsonaro has indicated support for tax cuts on fuels.

Paulo Guedes (Economy Minister) is strongly against the stabilization money, but favors modifications to the ICMS calculation. His argument is that measures can backfire if the real currency is weakened, as this would drive up imports, inflation, and interest.

The Brazilian central bank is the one that has the most stringent monetary tightening policy in the world. However, it also stated that the short-term measures taken to combat inflation may cause prices to rise over time.

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