oil royalties

The row over the bill to split Brazil’s oil royalties among the states has entered a new phase. The latest concern over the bill, which was the subject of a Supreme Court ruling this week, is that if it goes through, the so-called “producing states” (those with oil-producing assets within or offshore from their territories, mainly Rio de Janeiro, Espirito Santo and São Paulo) could start increasing local taxes on the oil industry. 

The credit ratings agencies have become the latest to weigh into the debate over Brazil’s oil royalties bill, with Fitch warning this week it could lead to a review of the ratings of Rio de Janeiro.

Rarely has a new law inspired so much bitter disagreement between Brazil’s states. The controversy potentially has implications over whether Rio de Janeiro will be able to successfully host the World Cup final next year and the Olympics the following year. 

There are only ten days left now until Brazil’s president, Dilma Rousseff, has to decide whether to approve one of the country’s most controversial pieces of legislation – the oil and gas royalties bill.

And she is still sticking to her guns, it seems.