(Reuters) – High fuel prices resulting from the Ukraine war have created an economic emergency in Brazil that justifies an aid package for self-employed truckers, the senator behind the government-backed proposal said on Wednesday as he unveiled the measure.
Senator Fernando Bezerra said the global spike in energy prices gave legal justification for bypassing a constitutional spending cap and delivering payments to truckers, a key constituency of right-wing President Jair Bolsonaro as he battles for re-election in October’s vote.
The state of emergency “will not be an open door for new expenses,” Bezerra said in a press conference, adding that the proposal has enough support to be voted on Wednesday by the Senate. It would still require approval in the lower house for passage.
Bolsonaro is behind in the polls to leftist former President Luiz Inacio Lula da Silva. Voters are angry at double-digit inflation and high energy costs.
In addition to the 1,000 reais ($192.38) aid for truckers, the proposal also seeks to increase the amount paid in the Auxilio Brasil social welfare program, and in a gas voucher. However, such measures can be implemented without declaring a state of emergency.
According to Bezerra, the total impact of the new benefits is around 38.75 billion reais ($7.5 billion), almost 9 billion reais more than the original government proposal.
To support these new expenses, Bezerra said the government will use extraordinary revenues from the privatization of Eletrobras and from dividends paid by state lenders Banco do Brasil and Caixa Economica Federal.
Initially, the proposal was intended to compensate Brazilian states that agreed to zero the ICMS state tax on fuel, but the idea was abandoned.
($1 = 5.1981 reais)
(Reporting by Ricardo Brito; Writing by Peter Frontini; Editing by Aurora Ellis)
