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Brazil is working on a power reform to increase subsidies for the poorest of the poor, Minister says

The Brazilian government is working on a reform of the power sector that will allow 60 million low-income families to be exempted from paying their energy bills, said Energy and Mines minister Alexandre Silveira.

Silveira, at an event in Rio de Janeiro said that about 50 million households are currently receiving a discount on their energy bills. The exact number of households that were exempted was not immediately known.

A government program allows low-income Brazilian households to request a partial or full subsidy on their energy bills. The cost is then added to those of other power users.

The proposed reform by the energy and mines ministries comes as President Luiz inacio Lula's government has reached its lowest level of popularity in his three-term tenure amid an increase in consumer prices.

Fernando Haddad, the Finance Minister in Brasilia, told reporters that after Silveira's remarks he had not received any study on increasing subsidies to energy bills for the poorest at his ministry or Lula's office.

Silveira said that the reform, whose details are still scarce, will reduce other subsidies. These include those given to large companies who generate their own electricity, and which drive up current electricity prices for Brazilian consumers.

Brazil's power regulator estimates that total subsidies in the sector will reach around 41 billion reais this year. Of these, 6.7 billion reais come from the program for low-income families.

Silveira said that the reform would be submitted to Congress during the first half of this year. ($1 = 5.8926 Reais) (Reporting from Rodrigo Viga Gaier and Leticia fucuchima, in Rio de Janeiro; additional reporting from Victor Borges, in Brasilia. Writing by Andre Romani & Marguerita Choy).

(source: Reuters)