Representative Marussa Boldrin presents a new version of the project that authorizes the use of oil revenue to reduce fuel taxes
The rapporteur of the PLP (Complementary Bill) 114/2026, deputy (Republicanos-GO), released on Tuesday (May 26, 2026) a new version of the text that authorizes the use of extraordinary oil revenues to reduce taxes on fuels. The document creates tax benefits of up to R$600 million for ethanol producers. The proposal is being processed in the Chamber of Deputies.
The was filed at the beginning of April by the leader of the government (PT) in the Chamber, deputy (PT-RS). The project covers the entire year 2026, during the conflict in the Middle East. The initiative creates an exception in the LRF (Fiscal Responsibility Law) to allow the use of extraordinary revenues to combat rising fuel prices.
The report introduced provisions that allow ethanol producers to use PIS/Cofins exemption credits to settle tax debts with the Federal Revenue Service. The exemption covers taxes “due or falling due”. The text also determines that any benefit granted to fossil fuels, such as gasoline and diesel, is equally applied to equivalent biofuels.
The deputy expanded the exemption for agricultural inputs established by the tax reform. The minimum percentage of gross export revenue for rural producers to be entitled to the benefit was reduced from 50% to 30%.
Aviation kerosene is now part of the list of fuels subject to tax exemption. According to the rapporteur, the inclusion was motivated by the rise in oil prices on the international market, which directly affected the airline sector.
The new text also provides for the maintenance of tax differentials for biofuels in the event of exemption. The tax reform established a maximum limit of 90% of taxes on fossil fuels. According to the rapporteur, the objective is to preserve the competitive advantages of biofuels in relation to petroleum derivatives.
RENEGOTIATION OF RURAL DEBT
The new version excluded the provision that would allow rural producers to use part of the extra revenue to renegotiate debts. According to members of agribusiness, the Lula government rejected the inclusion of a provision to allocate part of the revenue to the renegotiation of the sector’s debts.
The expectation of agribusiness was that a renegotiation mechanism could release up to . Representatives of the segment estimate the need for between R$120 billion and R$180 billion to face rural debt.
The Senate also debates a project related to the topic. One proposal envisages allocating resources from the Pre-Salt Social Fund to the renegotiation of rural producers’ debts, under the report of the senator (MDB-AL). There has still been no consensus on the text under discussion in the House.
The project was designed in response to the closure of the Strait of Hormuz. in March. The strait, through which around 80% of the oil traded worldwide passes, was closed as a result of the conflict.
The blockade raised the price of a barrel of oil to more than US$100, quoted at R$504.65 on Tuesday (May 26, 2026). The increase caused an increase in fuel prices and, simultaneously, increased revenue from oil exports.
On Monday (May 25, 2026), the Ministry of Finance. Given the Chamber’s delay in moving forward with the matter, the Executive issued a provisional measure that also provides for the use of extraordinary oil revenue to subsidize fuels.
The text establishes a 30-day deadline for payment of the subsidy. If the deadline is not met, the Executive will be obliged to pay interest equivalent to the Selic rate for the delay.
The provisional measure will be valid for 4 months and will lose validity if it is not approved by Congress within this period.
A is directly affected by the proposal. The state-owned company has not readjusted fuel since July 2024 and has accumulated losses or reduced profits with the rise in oil prices resulting from the war in Iran.
The provisional measure paves the way for Petrobras to increase the price of gasoline without impacting the end consumer. The objective of the project is to expand benefits already granted to diesel, such as subsidies and exemption from PIS/Cofins, also for gasoline.
