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Truckers in Brazil break the blockade after fuel shortages in the wake of the ban

Truckers in Brazil break the blockade after fuel shortages in the wake of the ban

SAO PAULO, Oct 22, Truckers blocking a major refinery in the Brazilian state of Minas Gerais dissolved on Friday, allowing fuel supplies to resume in Brazil's second most populous state.

The protesters, mainly truckers who deliver fuel, had been demanding a reduction in diesel taxes. Since Thursday, they've blocked roads near the REGAP refinery in the state capital Belo Horizonte, an action that spooked industry leaders and motorists, and caused some gas stations in Minas Gerais to run low on fuel.

Truckers have become increasingly vocal in recent months as a rise in global crude prices has driven up the cost of diesel domestically and hurt margins. Trucker groups have threatened a general strike next week, threatening if widely believed to be devastation for Brazil's economy.

A trucker strike over high fuel prices in 2018 brought the economy to a halt, and destroyed the government's remaining political capital at the time. As a result, Brasilia remains attentive to their demands.

President Jair Bolsonaro, who is expected to run for re-election next year, said on Thursday evening that the government would give Brazil's 750,000 truckers 400 reais ($70) each, to help offset the effects of rising fuel prices.

Shortly after, four key Treasury officials resigned amid concerns the government is considering lifting a constitutional spending cap, causing strain on local equity markets and the real currency.

Bolsonaro dismissed overspending worries in Brasilia on Friday, saying that the payment to truckers would cost the government less than 4 billion reais in total.

In afternoon trading, shares of Vibra Energia SA and Ultrapar Participacoes SA (UGPA3.SA), the owners of the nation's largest and second-largest gas station chains, were down more than 3.5%. The benchmark Bovespa equities index (.BVSP) was down 1.1%.

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