Portuguese 
English 
Spanish 
4 min of reading 
0 comments 
New Law Signed by Lula Authorizes Use of the Oil Fund for Housing, Emergencies, and Social Assistance. See What Changes.
President Luiz Inácio Lula da Silva signed Law 15.164/2025, which relaxes the allocation of funds from the Oil Fund. From now on, the funds from oil and gas exploration can be applied to popular housing projects, social infrastructure, and emergency actions in cases of public calamity.
The measure represents a significant change in the use of one of the country’s main public funds and aims to enhance its social function. The new law was published in the Official Gazette of the Union (DOU) last Tuesday, the 15th. The law was signed with some vetoes.
Oil Fund: New Investment Priorities
Created to invest in essential areas such as education and health, the Oil Fund can now support actions in food security, water infrastructure, social assistance, and the defense of indigenous people’s rights.
-
Lula celebrates the revival of the fertilizer industry in Bahia, reinforces the defense of Petrobras, and criticizes privatizations that increased Brazil’s external dependency.
-
U.S. pre-market falls with fears of global inflation and expectation of increased Chinese oil purchases
-
While oil fields bury saltwater underground, a pilot in the US uses solar steam without electricity for desalination of hypersaline water and transforms Permian waste into a potential agricultural and industrial resource.
-
Oil fluctuates above $100 after meeting between Trump and Xi Jinping and progress in Middle East negotiations
According to the government, the initiative seeks greater efficiency in the allocation of resources and addressing regional inequalities.
With the new legislation, the Oil Fund, fed by royalties from oil exploration, will no longer have an exclusive allocation for areas such as culture, science, and the environment.
Now, part of the resources can be directed to the management of the Unified Social Assistance System (SUAS), housing projects under the Minha Casa, Minha Vida program, in addition to public policies for food security and water infrastructure.
Although the education sector will continue to receive half of the available resources, an additional 5% for education and health has been established, valid for the next five years.
These additional resources add to the targets set out in the National Education Plan (PNE), maintaining education as one of the fund’s priorities.
Vetoes and Structural Changes in the Original Law
The proposal, originated from Provisional Measure 1.291/2025 and converted into Conversion Bill 2/2025, was reported by Senator Weverton (PDT-MA).
The text was approved by Congress but received two presidential vetoes. One of them removed the provision that set a minimum allocation of resources by region — 30% for the Northeast, 15% for the North, and 10% for the Midwest.
The government justified that “defining rigid rules for the allocation of the Oil Fund resources goes against public interest as it reduces allocative efficiency.”
Another veto dealt with the 120-day deadline for adapting the Annual Budget Law, which was deemed unconstitutional for compromising the autonomy of the Legislative Power.
Lula and the Strengthening of the Fund’s Social Function
For Lula, expanding the possibilities for using the Oil Fund reinforces the government’s commitment to fighting poverty and promoting social justice.
The new law also reforms the role of the Fund’s Deliberative Council, which will now indicate, in the Union Budget, the benefiting agencies and must disclose data on the use of resources.
Another important point is the authorization for the Union to sell excess oil and natural gas in areas not yet contracted in the pre-salt via public auction.
This measure, incorporated into the text from PL 2.632/2025, increases revenue and provides more flexibility in using the fund.
Tax Exemptions and Rules for Public Financing
The law also authorizes the use of fund resources to subsidize financing lines within public funds, as long as provided for by law.
However, it will not be allowed to use these funds to provide guarantees or assume credit risks on behalf of the Union.
To stimulate operations, the legislation provides tax exemptions such as IRPJ, CSLL, PIS/Pasep, and Cofins on reimbursable resources transferred by the fund.
This tax waiver will be included in the Union budgets from 2026 to 2030, and it will be up to the Civil House to monitor the impacts of the measure.
Strategic Expansion and Transparency
The sanctioning of the new law marks a significant step in the federal government’s fiscal and social policy. By giving new destinies to the Oil Fund, the Lula government aims to make it a more agile, effective, and responsive tool to the social urgencies of the country.
With the promise of greater transparency and decentralization in the application of resources, the proposal attempts to balance long-term goals with immediate demands, such as housing and combating hunger — sensitive topics for millions of Brazilians.
Be the first to react!