Government Response to the Fuel Crisis
Following the oil shock triggered by the war in Iran, the Brazilian government rolled out a series of provisional measures, resolutions, and bills to contain price pass-through and secure supply. This report maps the main regulatory responses between February and May 2026.
What you need to know
The six essential points to understand the Brazilian government's response to the fuel crisis.
The price of Brent crude rose above US$ 100 after the escalation of the conflict between Israel and Iran, with a real risk of a blockade of the Strait of Hormuz — the route through which about one fifth of the world's oil passes.
To contain pass-through to domestic prices, the government issued Provisional Measures (MPs) 1340, 1349, and 1358, totaling about R$ 13 billion in subsidies for diesel, gasoline, and LPG.
MP 1343 established minimum road freight floors, while MP 1344 opened an extraordinary credit line of R$ 10 billion to support the pricing policy.
A group of bills (PL 1853, PL 1282, and PLP 4788) revived the debate on re-nationalizing strategic fuel assets, in contrast to the free-market agenda of PDL 251.
A new institutional monitoring architecture was created, with MME Ordinance 61, CGC Resolution 1/2026, and ANP Resolutions 998, 1000, and 1002.
In the March 8–21 window alone, 35 new crisis-related legislative proposals were filed in Congress — an indicator of the speed of the political response.
Where the crisis is being addressed
The measures have concentrated on four main fronts, from the external shock to the domestic response.
- Geopolitical shock and the Strait of Hormuz
- Subsidies for diesel, gasoline, and LPG
- Freight floors and extraordinary credit
- Debate on re-nationalization vs. free market
- Petrobras pricing
- Regulatory monitoring (MME, CGC, ANP)
Two angles of the crisis response
The epicenter: the Iran shock
The escalation of the conflict between Israel and Iran and the concrete threat to the Strait of Hormuz pushed Brent above US$ 100, putting pressure on the entire fuel chain in Brazil and forcing an emergency government response within a few weeks.
The immediate response: subsidies and price control
MPs 1340, 1349, and 1358 concentrated about R$ 13 billion in subsidies for diesel, gasoline, and LPG, while MP 1343 (freight floors) and MP 1344 (R$ 10 billion in extraordinary credit) sustained the transport and distribution chain.
Upcoming regulatory milestones
MP 1340 expires on July 12 and MP 1343 on July 16 — both must be converted into law by Congress or lose their validity.
The trajectory of the ceasefire between Israel and Iran remains the main variable for the price of Brent and, consequently, for the pressure on Brazilian subsidies.
The vote on PL 1625 in Congress could redesign part of the fuel pricing policy beyond the emergency horizon.
The clash between the re-nationalization proposals (PL 1853, PL 1282, PLP 4788) and the free-market agenda (PDL 251) is expected to intensify in the coming months.