Haddad confirms diesel re-encumbrance and prepares announcement of more measures – 12/26/2023 – Market

The Minister of Finance, Fernando Haddad, confirmed this Tuesday (26) that, starting next year, there will be a re-encumbrance on diesel, and promised to announce new measures to increase revenue.

“As of January 1st, diesel will be re-encumbered. And this re-encumbrance will be carried out, I am confirming that it will be. But the impact of the re-encumbrance is R$ 0.30 and the impact of the reduction already announced by Petrobras is more than 50 %”, Haddad told journalists, after meeting with vice-president Geraldo Alckmin.

“If you compare the price of diesel with December 2023, you have a drop in the price of Petrobras even with the increase. There is no reason to [o posto de combustível] increase. It has to decrease,” she said.

The minister also said that he will announce new measures in the coming days to increase government revenue. These are bills and provisional measures, already approved by President Luiz Inácio Lula da Silva (PT), and must be sent to the National Congress by Thursday (28).

The statements are made amid continued skepticism among analysts about the feasibility of the government eliminating the deficit next year, a goal set out in the budget documents.

The government managed to approve a series of measures linked to revenue in Congress throughout the year, but economists see the revenue generated by them as insufficient to eliminate the hole in public accounts.

The changes made by parliamentarians to the negotiated proposals reinforced the questioning about the potential of the measures and the uncertainty about the trajectory of public accounts in the coming years.

The scenario is further hampered by the expected slowdown in the economy next year, which should limit the natural expansion of revenues.

Haddad, on the other hand, said that new measures could be launched. The minister had been reiterating that he would continue with his agenda of rebuilding the Brazilian State’s fiscal base — which, in his view, has been dilapidated in recent years.

The strategy is in line with Minister Simone Tebet (Planning), who often mentions “tricks up her sleeve” to be used in case of need.