By Sarah de Sainte Croix, Senior Contributing Reporter RIO DE JANEIRO, BRAZIL – Yesterday the Ministry of Finance announced plans for a reduction in taxes levied on fuel after Petrobras released a statement saying that they would be raising the prices of gasoline and diesel oil at the refinery by 10 and 2 percent respectively from November 1st. Minister of Finance, Guido Mantega, announced a reduction in fuel taxes, photo by Fabio Rodrigues Pozzebom/ABr. As of the beginning of next month the fuel tax known as CIDE will be reduced from R$0.192 per liter of gasoline to R$0.091 per liter – a reduction of almost 53 percent. For diesel oil, the same tax will be lowered by 32.8 percent, seeing it drop from R$0.07 per liter to R$0.047. The reductions will remain in place until June 30th 2012 according to reports. The Ministry of Finance indicated the measures have been taken in order to protect consumers from the rise in costs and to stabilize the price of fuel on the domestic market, promising that the price at the pump will remain the same (currently R$2.82 per liter for gasoline and R$2.001 per liter for diesel in Rio de Janeiro). According to one analyst, Petrobras registered a loss of R$4 billion between January and October. The state owned company said it was raising prices to bring them more in line with the international market. This is the second time in thirty days that the government has reduced the CIDE to protect prices at the pump from fluctuations in the international market. As a result, the government looks set to lose out on around R$2 billion in tax revenue whilst the restrictions are in place. Read more (in Portuguese). * The Rio Times Daily Update is a new feature we are offering to help keep you up-to-date with major news as it happens. Leave a Reply Cancel Reply Your email address will not be published.