Lula’s government in Brazil lowers fuel prices ahead of runoff vote against Flavio Bolsonaro
The Brazilian government has implemented new fuel tax cuts and increased subsidies to lower prices ahead of the upcoming presidential runoff. These measures are intended to stabilize fuel costs amid international supply concerns following the conflict in the Middle East.
Why it matters
Economic policy decisions during an election cycle significantly influence voter sentiment and the fiscal stability of the nation.
Brazilian President Luiz Inácio Lula da Silva's government on Friday (October 9, 2026) announced new fuel tax cuts and extended existing subsidies aimed at lowering fuel prices, just over two weeks before a closely contested presidential runoff.
Fuel prices are a particularly sensitive issue for voters, who will decide on October 25 whether to elect Sen. Flavio Bolsonaro, the son of former President Jair Bolsonaro, or grant Mr. Lula a fourth, nonconsecutive term. Mr. Bolsonaro received about 2 million more votes than Mr. Lula in Sunday's (October 4, 2026) first round.
A new decree eliminates federal taxes on the import and sale of gasoline for 30 days, with the possibility of an extension. The measure is effective from Friday (October 9, 2026), the same day previous measures that lowered taxes expired. It extends a tax exemption and increases a subsidy for ethanol.
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