Petroleo Brasileiro S.A. - Petrobras (PBR)

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$PBR Reuters: Brazil weighing gasoline tax hike

Brazil's government may announce a tax increase on gasoline to help meet this year's budget target amid the country's slow economic recovery, Reuters reports.

Finance Ministry officials are weighing the impact of the potential measure before an official announcement tomorrow, according to the report, which cites a government source.

The thinking is that gasoline tax increases would have little inflationary impact after successive price cuts by state-controlled oil company Petrobras (PBR +1.9%), and would help ethanol producers become more competitive after years of heavy losses in the biofuel industry.