July 9 (Reuters) – Brazil’s government on Thursday approved the extension of a 12% tax on crude oil exports for another 60 days, a measure introduced in March amid rising oil prices linked to the Iran war.
The decision was taken by Gecex, the executive management committee of Brazil’s foreign trade chamber Camex, which said in a statement it would review the measure in 30 days.
Government officials had recently argued that softer oil prices opened the door to a possible reduction or elimination of the export levy, but that option was ultimately shelved for now.
Gecex stressed that the measure is temporary and was adopted “in light of developments in the international scenario and their impacts on the oil and fuel markets.”
Although Brent crude futures were trading lower on Thursday at around $76 a barrel, they climbed on Wednesday to their highest level since June 22 as tensions in the Middle East intensified. Prices, however, remained well below the more than $118 a barrel reached shortly after the war erupted in late February.
President Luiz Inacio Lula da Silva’s government has argued that revenue raised from the tax would help fund measures aimed at shielding consumers from the inflationary impact of the war.
It subsequently announced a series of fuel subsidies, including for diesel, gasoline, aviation fuel and cooking gas.
Last week, the government began what it called a gradual rollback of those tax benefits following the retreat in Brent prices.
Finance Minister Dario Durigan said earlier on Thursday that a decision on removing a gasoline subsidy has been postponed until next week.
Brazil Energy Insight 
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