Since Lula took office, gasoline and ethanol prices have skyrocketed across Brazil

Following the transition to Luiz Inácio Lula da Silva’s presidency, a national increase of 12% in gasoline prices has been recorded.

Seven states have experienced a surge exceeding 15%, with Amazonas seeing the highest rise of 25%, bringing the cost per liter to R$6.30 (US$1.26 per liter or US$4.76 per gallon).

Other significantly affected states include Acre, Roraima, Sergipe, and Paraíba.

GDP per capita in Brazil is about nine times lower than in the U.S. The Purchasing Power Index is about one-third that of the U.S.

Simply put, the fuel cost hurts Brazilians as much as if Americans had to pay a price of at least US$14.30 per gallon.

Several factors contribute to this escalation.

The reintroduction of partial tax collection on fuels across the country since March 1 has added R$0.47 per liter.

Additionally, from June 1, implementing a uniform Tax on the Circulation of Goods and Services (ICMS) has led to further increases.

By June 29, the full Pis/Cofins rate was reestablished, augmenting the price of gasoline by R$ 0.34 per liter.

These changes also impact ethanol, which has seen an uptick in 21 states since the end of the previous year.

Ethanol’s increase affects gasoline prices, as the latter is blended with 27% ethanol before distribution to stations.

The greatest hikes were noted in Sergipe and Amazonas, among others.