In 2024, Brazil collected R$108,2 billion in so-called “oil revenues” from royalties, special participations and g bonuses, with the Pre-salt responsible for 79% of this amount.
However, only 0,16% of this total (or R$168,33 million) was effectively directed towards environmental and climate actions.
The data is part of the Technical Note “Oil income: challenges, contradictions and paths to overcoming the fossil era”, prepared by Inesc (Institute of Socioeconomic Studies), which analyzes how oil income has been managed by the country and shows the gap between the potential of this resource and its real application.
The study reveals that, despite the revenue generated by oil, obsolete sharing criteria, legal obstacles and the lack of effective regulation prevent a strategic distribution of this income.
In practice, the resources from the Pre-Salt have not yet reached the population in the way they were promised, especially those who depend most on public policies to combat poverty.
“While billions go unused, Brazil postpones fundamental investments in education, health and tackling climate change,” said Alessandra Cardoso, political advisor at Inesc and author of the Technical Note.
Geographical concentration
According to the study, the current distribution of oil revenues shows “glaring regional inequalities”. The state of Rio de Janeiro alone receives 82,6% of the oil revenues allocated to all states.
Income concentration also occurs at the municipal level: five cities in Rio de Janeiro — Maricá, Macaé, Niterói, Saquarema and Campos dos Goytacazes — received R$10,6 billion in royalties, equivalent to 59% of the R$18 billion transferred to all municipalities in Rio.
According to the study, this distribution originates from legal criteria established in the last century, which were based on the geographical proximity of federative entities in relation to production fields.
“This extreme concentration clashes head-on with the promises of using oil revenue to reduce social inequalities in the country, increases regional inequalities and makes it even more difficult to build a development path that overcomes fossil fuel dependence,” explains Alessandra.
Judicialized income
Law No. 12.734, approved in 2012, provides for a more equal distribution of oil revenue, guaranteeing 49% of the revenue to be shared among all states and municipalities, based on the criteria of the FPE (State Participation Fund) and the FPM (Municipal Participation Fund).
However, Inesc points out that the measure was contested by the “producing” states and, since then, this more democratic sharing has been suspended. According to the Institute, around R$8,7 billion were not transferred to other regions of Brazil because of this legal obstacle in 2024.
Another legal obstacle arises around the Law No. 12.858 / 2013, which sought to direct the income of subnational entities to education (75%) and health (25%) policies as a response to the 2013 demonstrations (June protests).
With the judicialization of this Law, Inesc points out that there is currently no legal obligation to allocate any portion of the income distributed to subnational entities to education and health.
dammed money
While the federative entities do not reach an agreement on the distribution and use of oil revenue, the Union faces obstacles to the strategic use of this revenue, assesses Inesc.
Of the R$48,5 billion received by the Union from oil and gas, more than R$20 billion were not even used in 2024.
According to Alessandra, the low execution is largely due to the lack of regulation of the Social Fund, an instrument created in 2010 to finance strategic and redistributive policies.
She highlights the lack of a governance structure and investment policy that leads to a lack of transparency, based on circumstantial and politically motivated decisions, of the resources arising from the capitalization of the Fund – which reach between R$15 and 20 billion annually.
In 2024, R$20 billion was used to help large companies affected by the floods in Rio Grande do Sul, and in 2025, the Government announced that another R$20 billion will be used to finance Minha Casa Minha Vida.
“These are important and necessary expenses, but they do not result from a strategic, planned and transparent vision regarding the destination of this income, whose nature is distinct and must be at the service of a trajectory of building a fairer economy and society free from oil,” she said.
Regarding social policies, the study indicates that the education sector received the largest share of funds executed by the Union last year, with R$18,2 billion authorized, of which R$17,9 billion was actually used. Health received authorization and executed R$700 million in 2024.
Environment
In addition to the modest percentage of 0,16% of oil revenue being applied to environmental and climate policies last year, the Inesc report reveals that the Ministry of Science, Technology and Innovation received 1% of the resources, almost entirely directed to the oil sector, to the detriment of research into renewable energy or clean technologies.
“This is in addition to the current criteria of the New Fiscal Framework, which make it difficult for oil revenue to be applied to primary expenses for investments in climate adaptation, risk management, science and technology, which are essential for the country to be able to face climate extremes and build medium-term solutions for dependence on oil,” says Alessandra.
In this scenario, the Inesc Technical Note brings suggestions such as:
- Overcome the judicialization of Law 12.734/2012 to allow a more equitable distribution among the federative entities;
- Reestablish the mandatory application in education and health in states and municipalities, as provided for in Law 12.858/2013;
- Clearly regulate the Social Fund, allocating at least 20% of resources to climate actions;
- Remove oil revenue from the constraints of the New Fiscal Framework, to allow its use in public policies to combat climate change and inequality.
“It is urgent to transform this income into an instrument of social and climate justice,” concludes Alessandra.
For more information, access the study at this link.
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