The approval by the Chamber of Deputies, on Wednesday night (13), of a complementary bill that changes the collection of the Tax on Circulation of Goods and Services (ICMS) – which is state – on fuels did not ease the temperature of the debate on the pricing policy adopted by Petrobras since 2016 and expanded during the government of Jair Bolsonaro (no party).
The change, which still needs to pass through the Federal Senate and presidential sanction, determines that the states establish a fixed annual amount to be charged for ICMS per liter of fuel sold. It also sets a ceiling for this tariff, which cannot be higher than the rate applied to the average fuel price in the two previous years.
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For federal deputy Helder Salomão (PT-ES), the measure is a “patch” that does not address the root of the problem: the International Parity Policy (PPI), practiced by Petrobras since 2016 and deepened during the Bolsonaro government, and which it passes on to the consumer the prices practiced on the world market together with the dollar rate.
“This is the main aspect that needs to be changed. Until this changes, we will not see any improvement in fuel prices in Brazil,” says Salomão, who also accounts for the low productivity of the country’s refineries: “We are selling cheap crude oil and buying expensive refined oil products from the market International. So, this account does not close”.
The Brazilian Federation of State Tax Inspectors Associations (Febrafite), which represents the State Finance Departments, estimates that the states would not collect up to R$ 24 billion if the proposal prevails. “At a time when we already have seven states undergoing fiscal recovery and others entering a fiscal emergency, the population will be the first affected, because the collection covers expenses in areas such as health, education and security”, argues Rodrigo Spada, president of Febrafite.
Under the command of General Joaquim Silva e Luna since April this year, Petrobras has been under political pressure from the federal government to try to retain as much of the adjustments as possible, reducing damage to the president’s popularity. This is the assessment of Edson Silva, director of consultancy ES Petro, who sees “a confusing and unpredictable policy”.
“Today, we are living with a gap of 8.8% for gasoline compared to international prices and 17.8% for diesel, according to our calculations”, ponders the consultant, who is also based on international projections to reach a conclusion worrying: “We are threatened with facing, in the coming months, in addition to high prices, a shortage”, he says.
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Mattress to cushion falls
Also in the Chamber of Deputies, in parallel with the vote on changes in the ICMS charge called by the president of the House, Arthur Lira (PP-AL) on Wednesday, a public hearing debated alternatives to face the sector’s crisis, such as the Project of Law 750/2, authored by Deputy Nereu Crispim (PSL-RS), which creates the Fund for Stabilization of Petroleum Derivatives Prices.
The proposal inserts provisions in the Petroleum Law and provides for progressive export tax rates according to the value of the barrel, setting the collection according to some pre-established price ranges per barrel. In this way, any need to import oil products would receive a subsidy from the fund.
Consultant Edson Silva believes that this can be an interesting solution to mitigate the impacts of market fluctuations. “Given the Brazilian realities, we need buffers for the impacts of this type of policy, because we do not have control over the commodity or the exchange rate, which is always very vulnerable in Brazil”, he defends.
Although they agree on this issue, Silva and Helder Salomão have opposing views on what priorities in Petrobras’ management should be. While the consultant does not see problems in prioritizing profits, including shareholders, the PT deputy rejects market interference in regulating fuel prices. “This leads to what is happening here: we earn in reais and pay for fuel in dollars”, exemplifies Salomão.
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The characteristics of Brazilian cargo transport, which prioritizes the automotive modality, are also directly related to rising inflation. According to the Broad National Consumer Price Index (IPCA), released last week by the IBGE, the country registered 1.16% inflation in September, reaching 10.25% in 12 months – almost 2% of this percentage regarding fuel.
Therefore, increases in oil products also produce a ripple effect that puts pressure on the prices of public transport, freight and practically all products. Soaring food prices are accompanied by food insecurity and the despair of millions of low-income families.
If the rise in diesel is one of the villains of inflation, the price of ethanol soared this year as a result of the drought and drought, being one of the factors behind the rise in fuel prices. This is because, currently, gasoline sold throughout the country is diluted with anhydrous ethanol at the maximum capacity allowed by law, which is 13%.
For Edson Silva, the decision not to reduce this percentage of mandatory ethanol dilution is essentially political. “If the government wants to reduce and contradict the interests of mill owners, this can be done without the Chamber having to vote on anything, because there is already a decision on this issue and this has already been done at other times,” he explains.
Edition: Vinícius Segalla