Brazil Moves to Cap Fuel Costs as Petrobras Cuts Aviation Fuel and Joins Diesel Subsidy

Overview

• The federal government issued Provisional Measure 1.363/2026, published June 1, authorizing a R$1.12 per‑litre diesel subvention for refiners and importers that runs from June 1 to December 31 and names the ANP to process payments.
• Petrobras announced a 14.2% cut in aviation kerosene that equals about R$0.93 per litre, adjusted diesel prices by R$1.12 per litre, and confirmed it will adhere to the R$1.12 subsidy while keeping distributor prices stable and allowing buyers to parcel QAV purchases.
• Importers and their trade group report that subsidy payments remain overdue by more than 60 days, only around 20 companies have formally joined the program, and the delays are causing cash‑flow stress that is discouraging new fuel imports.
• Diesel drives broad inflation and aviation kerosene accounts for roughly 45% of airlines’ operating costs, with Petrobras supplying about 85% of domestic QAV, so the measures aim to protect household costs and airline liquidity even as market uncertainty continues.
• Watch for whether the ANP begins timely payments, how many firms enroll before Congress must ratify the MP, and whether low uptake or payment delays keep pump prices and import volumes under pressure despite Petrobras’s price moves.