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Brazil economy minister backs bigger cooking gas subsidies as crude costs soar -sources -Breaking

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© Reuters. As part of an initiative by FUP, a worker in Vila Vintem (Rio de Janeiro), Brazil, unloads cooking gas containers for residents. The workers were doing so to help them buy fuel at a fair cost amid the high prices of energy.

Marcela Ayres, Bernardo Caram

BRASILIA, Reuters – Brazil’s Economy Minister supports a proposal for cooking gas subsidies to be increased for families with low incomes in response to the soaring prices of crude oil during the Ukraine conflict. Two Economy Ministry sources who have knowledge of the matter confirmed this to Reuters.

Political pressure on Economy Minister Paulo Guedes, who was facing double-digit inflation due to rising crude oil prices, mounted as the price of oil surpassed $110 per barrel.

Senate already has a bill that would provide more funding for subsidies for cooking gases. It also proposes to modify the calculation of the state ICMS fuel tax.

The ministry opposed a rival Senate bill that would establish a fund for Brazil to stabilise fuel prices, according to sources who asked anonymity to speak on the matter confidentially.

Rodrigo Pacheco (Senate President) stated that both bills would be up for vote next Wednesday.

Sources within the ministry said that an expanded cooking fuel voucher is “less bad” fiscally because it helps the most disadvantaged and not all-around subsidies.

Jean Paul Prates (the bill’s principal sponsor), proposed that the program’s annual budget be doubled to reach 11,000,000 families. This would need an additional 1.9 million reais (377 million).

Although he suggested that an extraordinary credit could cover the costs, bypassing Brazil’s constitutional spending limit, ministry sources stated it would need to be cut elsewhere.

($1 = 5.0408 reais)

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