Brazilian energy lobby urges expiration of 12 percent crude export levy
Brazil’s primary oil and gas trade body has formally requested that the government allow a 12 percent crude export levy to lapse in early September, warning the measure is suppressing shipment volumes and threatening the sector's global competitiveness.
The Instituto Brasileiro de Petróleo, Gás e Biocombustíveis (IBP) submitted a formal request on 21 August 2026 asking the government not to extend the 12 percent levy on crude petroleum exports. The trade body, which represents more than 200 member companies, argues the tax should be allowed to expire on its scheduled date of 7 September 2026.
The IBP contends the levy is "redundant and damaging to the country’s competitiveness" because existing production-sharing agreements already capture windfall price gains effectively. As evidence of the tax's negative market impact, the association highlighted a 28.3 percent drop in Brazilian crude shipments in May 2026 compared to the previous month. Export volumes fell from 62.8 million barrels in April to 45 million barrels in May, while associated revenue declined by 23.3 percent.
Industry leaders also pointed to the substantial fiscal returns the state is already receiving from the sector. The IBP noted that Brazil distributed R$ 36.5 billion in oil royalties during the first half of 2026. Of that total, R$ 9.6 billion, or 26.3 percent, was directly attributed to the recent surge in global crude prices.
Despite the industry pushback, the Ministério da Fazenda prefers to maintain the current fiscal framework. A technical note issued by the finance ministry on 13 August 2026 recommended keeping the 12 percent rate in place until the end of its current legal validity. The government originally introduced the levy in March 2026 to capture a portion of rising oil profits and help subsidize domestic transport diesel.
The finance ministry originally estimated the measure could generate between R$ 13.9 billion and R$ 17.4 billion over a four-month period, depending on Brent crude prices. The current iteration operates under a resolution passed in early July, which explicitly limits the measure to a 60-day window. The resolution also mandated a reassessment after 30 days, a milestone that likely passed in early August without a policy reversal.
The impending deadline forces a critical decision for Brazilian policymakers balancing fiscal revenue against export viability. Congress is still processing the original legislative measure, meaning the legal foundation for the tax remains in flux. Investors and energy executives will be watching the executive management committee of the Foreign Trade Chamber closely to see if Brasília prioritizes short-term revenue collection or long-term sector competitiveness.
