Brazil cuts gasoline tax

Brazil reduced a tax on gasoline in a government decree on Tuesday, a measure which is expected to lift profit margins at state-controlled oil company Petrobras without stoking inflation at consumer levels. The decree comes as Petrobras is importing at a loss more gasoline due to strong demand and limited domestic refining capacity. It also highlights the government's concerns over benchmark inflation which reached 7.33 percent, already well above a 6.5 percent government ceiling.
Government price controls on gasoline at the pump have forced Petrobras to sell the fuel at below international market prices at the domestic level, which showed up as losses in the company's second quarter earnings report.