Brazil's government mulls increase in welfare program, senator says

FILE PHOTO: Gasoline and diesel price are displayed near a gas station following the announcement of updated fuel prices at at the Brazilian oil company Petrobras in Brasilia, Brazil June 17, 2022. REUTERS/Ueslei Marcelino

BRASILIA (Reuters) - Brazil's government is mulling a measure to increase its Auxilio Brasil welfare program, in addition to raising the amount paid in gas vouchers and creating an fuel aid for truckers, the government's leader in the Senate said on Thursday.

The increase in the program - to 600 reais ($114.96) - would be part of a strategy by President Jair Bolsonaro's government to boost social spending ahead of elections in October. The latest opinion poll showed Bolsonaro with 28% of voters' support compared with 47% for former president Luiz Inacio Lula da Silva.

"There is a discussion about the possibility of increasing the welfare program by 200 reais temporarily until the end of the year," said Senator Carlos Portinho in an interview after a meeting with party leaders.

According to Portinho, the intention is to allow those expenditures to bypass a constitutional spending cap due to the war in Ukraine and rising fuel prices, which are pressuring double-digit inflation in Latin America's largest economy.

The government is willing to put 30 billion reais on the table - a figure that would initially be used to compensate states for state fuel taxes they decided to cut, the senator said.

($1 = 5.2191 reais)

(Reporting by Ricardo Brito; Writing by Peter Frontini; editing by Peter Siqueira and Grant McCool)

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