The oil lobby group claims that the export tax in Brazil is an obstacle to new investment

The head of the lobby group IBP said at a Wednesday event that Brazil's new export tax on crude oil, which was created by the government a month ago, is a hurdle to new investments for oil majors. He added that the group may file a suit against the tax.

As oil prices rose due to the U.S./Israeli war against Iran, the government abolished?local taxation on fuel sales in order to reduce prices for consumers.

Roberto Ardenghy, IBP's head of corporate affairs, said: "This tax is not appropriate. Especially given that Brazil needs to be a destination for long-term investment in the oil and natural gas sector."

Ardenghy said that the lobby group representing oil majors in Brazil will sue the Brazilian government to determine the legality and fairness of the tax. However, if Congress reverses the decision or Brazil decides to eliminate the tax then the lawsuit won't be filed.

The government didn't immediately respond to a comment request.

In a panel discussion, Shell, Spain's Repsol Sinopec and TotalEnergies of France, Equinor from Norway, and Exxon from the United States, all stressed that "stability" was needed in Brazil's fiscal and regulatory environment to encourage new investment.

The government announced that the tax was a temporary levy, which would last until the end this year. Its aim is to increase domestic refining, as well as secure the supply of fuel within the country.

(source: Reuters)