Truckers angry at rising fuel prices have blocked major roads across Brazil since May 21, preventing the delivery of goods to supermarkets and gas to petrol stations.
Citing concerns about lack of medicine and basic goods, President Michel Temer said Sunday that his government would subsidize the cost of diesel for the next 60 days, exempt empty trucks from tolls and introduce a minimum freight fare for truckers.
Temer said diesel prices at the pump would be cut by 0.46 reals per liter (roughly $0.13) for the next two months. He said prices would increase just once a month after that. Prices had risen to 3.6 reals ($0.98) per liter before the strike, with five increases in the week before truckers took action.
The government would pay state-run oil company Petrobras the difference in price, Temer said in a televised address from the presidential palace in Brasilia.
The government said its security forces were escorting fuel trucks to key infrastructure such as hospitals.
"The government was always open to dialogue and we were able to sign an agreement with the leaders of this movement," Temer said Sunday. "We spent the week trying to meet the truckers' grievances, but we were also worried about all the Brazilians that faced difficulties these days."
"We understand the natural difficulties truckers endure in their jobs, but we became increasingly worried by what was happening in the health sector. We received incredibly worrisome statements here regarding the lack of medicine and basic goods," he continued.
The measures announced by Temer Sunday were published in the government's Official Diary.
According to web portal G1, this was one of the prerequisites made by the truckers' union in order to end the strike.
"If it's in the Official Diary, our recommendation is for the concessions to be accepted," Autonomous Freight Transporters Union (Sinditac) president Carlos Alberto Dahmer told G1.
Political Affairs Minister Carlos Marun said that subsidizing diesel would cost the federal up to 10 billion reals (roughly $2.7 billion).
Truck drivers block a road near Rio Friday.
The strike has choked Brazil's economy, with Sao Paulo, Brazil's largest city and financial hub, declaring a state of emergency Friday.
The city cut its bus services by half Saturday and expected to stop them entirely by Monday night as fuel stocks ran out, a city hall spokesperson said. Trash collections in the city had also been suspended.
Local governments in many other cities reduced public transport to conserve fuel. In Rio de Janiero less than a fourth of normal bus services ran Saturday, a city official said. Food in public schools was only guaranteed until Monday, according to Rio's City Hall.
Marun said the President was concerned about the possibility of loss of life and the government was "doubling down on the application of fines against truckers with medical cargo."
Trucks sit idle in Brasilia.
Temer has said he is not running for reelection. A number of presidential candidates, from both right and left-wing parties, have also spoken out in support of the striking truckers.
Journalist Marcia Reverdosa reported from Sao Paulo, Flora Charner wrote from Atlanta and Susannah Cullinane wrote from Auckland, New Zealand.