Brazilian government 'looks to protect country for oil price rises'

Date added: 10th June, 2008 at 10:31 (view all articles from June, 2008)

Categories: Natural Resources

The Brazilian government is insulating it businesses from rising costs of oil by reducing fuel taxes, a report has claimed.

According to the AFP news agency, the Brazilian government is concerned that rising fuel prices would damage farm production and make transport more expensive and so is acting to keep prices down for consumers and businesses.

Renato Maluf, president of the Brazilian Food Security Council, explained to the agency: "The strengthening of the real and the stability of diesel have averted a bigger impact on Brazil."

In recent months, the government has reduced the tax on a litre of petrol to 0.28 reals, while diesel taxes have fallen from 0.07 reals to 0.03 reals.

The publication noted that Brazil was in a particularly good position to weather the current oil crisis, as it is already self-sufficient in terms of production.

What's more, around 80 per cent of Brazil's cars can run on either petrol or ethanol.

The stability that the Latin American nation's lack of dependence on oil indicates could mean that it is an excellent time for people to think about investment in Brazil.

Recent figures in fact showed that more and more people were making investment in Brazil and the country's foreign direct investment jumped 26 per cent in the first four months of the year.

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