We derive optimal road fuel taxes for gasoline, diesel and ethanol for Brazil. Fuel-related externalities, including carbon emissions and air pollution, and distance-related externalities, such as accidents, congestion and road damages, are added as Brazil has today no other way to effectively tax these components. A value-added tax (VAT) of 26.5 per cent is added to the tax for gasoline and ethanol, but not for diesel which is mostly an input and not final consumption. On this basis, we find that the optimal gasoline, diesel and ethanol taxes are US$1.03, 0.85 and 0.58 per litre, of which the respective carbon taxes, excluding VAT, are about US$0.14, 0.16 and 0.04 per litre given a carbon price of US$60 per ton of CO2. The largest externality component for gasoline and ethanol is accidents followed by congestion and carbon emissions. For diesel, air pollution is most significant, followed by accidents and congestion.