Brazil Close to Buying Diesel From Russia, Bolsonaro Says

(Bloomberg) -- Brazil is negotiating to buy cheaper diesel from Russia as part of a strategy to reduce domestic fuel prices, according to President Jair Bolsonaro.

Most Read from Bloomberg

• Elon’s Out

• Fresh US Inflation Peak to Keep Fed on Aggressive Rate Path

• Stocks Swoon as Treasuries Sound Recession Alarm: Markets Wrap

• NYC Prepares for the ‘Big One’ With Nuclear Attack PSA Video

• Biden Administration to Again Extend the Covid Public-Health Emergency

The deal would come after Bolsonaro visited President Vladimir Putin in February, just days before Russia invaded Ukraine, in a bid to ensure a steady supply of fertilizer exports to Brazil.

“I’ll likely buy cheaper diesel from Russia,” the president told supporters on Monday as he left the residential palace in Brasilia, adding that gasoline prices are also falling after most state governors agreed to reduce taxes on fuel. “Everything is going well in Brazil.”

High fuel prices and inflation have been the main economic challenges for Bolsonaro as he seeks re-election in October. The conservative leader has been trailing leftist former President Luiz Inacio Lula da Silva in all major opinion polls less than three months before the vote.

Read More: Brazil’s Bolsonaro Backs Neutral View on Russia Invading Ukraine

Despite sanctions imposed by the US and its allies on Russia, the Brazilian government has continued to negotiate with Moscow as it seeks to remain neutral about the conflict.

With the UK and European Union both set to eliminate seaborne imports of refined petroleum products -- including diesel -- from Russia, the country should have plenty of spare fuel for other potential buyers such as Brazil. However, setting up the financial and physical logistics to reroute large volumes of clean petroleum product is unlikely to be easy, and the country’s refineries may end up producing less.

(Updates with context on Russian supplies in last paragraph)

Most Read from Bloomberg Businessweek

• WeChat Is China’s Most Beloved (and Feared) Surveillance Tool

• Natural Gas Is Gaining Ground, and the US Has Plenty of It

• Using Artificial Intelligence to Predict the Next Covid Variants

• The US Is Thwarting China’s Love Affair With Israeli Tech

• Making Sure GM Has the Financial Muscle for the Electric Future

©2022 Bloomberg L.P.