“Gas for cooking or food?”: Brazilian families face

O Brazil de Facto Ceará interviewed Fernandes Neto, Director of the Single Federation of Oil Workers (FUP) to talk about famine, more precisely about how the increase in the price of cooking gas and fuel directly affects the lives of the Brazilian people.

According to Neto, in 2016, during the government of Michel Temer, there was a change in Petrobras’ price policy, which can be seen as the main villain in this whole scenario of increase.

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“With this modification, the price policy started to take into account the price of a barrel of international oil, in accordance with the quotation of the dollar. This, added to the costs of bringing these barrels from abroad to Brazil makes this price even higher”.

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Neto explains that the increase in the value of diesel modifies the entire production chain and also collaborates with the rise in the prices of rice, beans and meat, as, according to him, all the transport of these inputs depends on road transport. “While diesel has these absurd values, consequently all the inputs will also be”.

Brasil de Fato – I would like you to explain what the Single Federation of Oil Tankers is and what is its role?

Fernandes Neto – In fact, the FUP was created in 1994 with the objective of unifying all the union work of the oil sector that already exists in Brazil. Altogether, the country has about eighteen unions that represent some states. Some states even have more than one union focused on the category. As already mentioned, it was created to work with the oil company and to unify this force of oil workers, which I can say is a very united and very strong category. So this federation comes to fulfill this role of strengthening the category and, consequently, the struggle of the oil workers.

It is important to point out that it is no longer a single federation. In 2006 another federation was created, where five of the eighteen existing unions migrated to this new federation called the National Federation of Oil Workers (FNP). Now the FUP represents the thirteen unions that did not make this migration, while the FNP represents the five unions that migrated. However, we are always carrying out joint actions, not only in favor of the defense of oil tankers’ rights, as the FUP is affiliated with the Central Única dos Trabalhadores (CUT) that makes us perform activities in other union centers. In other words, in general, the FUP works on the rights of workers with empathy, together with post offices, teachers, always supporting other struggles and categories.

Why are gasoline and cooking gas so expensive?

We have been hearing this question almost every day, even from family members who end up thinking that this price is the fault of the workers and even of Petrobras itself, but I will contextualize the answer because, in fact, the explanation is not so simple. In 2016, still during Michel Temer’s government, there was a change in Petrobras’ price policy, which can be seen as the main villain in this whole scenario of increase. With this change, the price policy started to take into account the price of a barrel of international oil, in accordance with the quotation of the dollar. This, added to the costs of bringing these barrels from abroad to Brazil, makes this price even higher.

However, the government is the majority shareholder of Petrobras and the company has enough structure to supply the entire national market, so why would the government be interested in placing the price of barrels linked to the international market? This whole scenario gets worse during the Bolsonaro government, where it is clear what the president’s intentions are, along with Economy Minister Paulo Guedes, who is to privatize Petrobras, among other state-owned companies. And this, in fact, has been happening little by little with the sale of refineries and companies linked to Petrobras. For the government, some questions are pointed out so that they can sell and privatize this company. The first is that for this sale to take place, from the buyer’s point of view, it is important that the value of the fuel is high, as they would need to import fuel from abroad to sell in the national territory, since the competition would not be working with the fairest price.

The second point is the minority shareholders, small international groups that put pressure on Petrobras and the government to increase fuel prices, making a greater profit on this increase in the short term. And since last year we’ve been hearing about the distribution of profits and dividends upstream, making millions for these small shareholders. We were sad to know that Petrobras could be selling the fuel at prices below five reais, at a fair price, and still it would continue to yield great profits for the company, but unfortunately what we have seen is the opposite.

Could the price of gas and gasoline today be different? And if so, how would that be possible?

One of the most important reasons reported in the media is that prices are higher due to the ICMS (Tax on Circulation of Goods and Provision of Interstate and Intermunicipal Transport and Communication Services). And in fact, the ICMS has not increased in recent years and there is no intention of increasing it, either in relation to the price of cooking gas or the price of gasoline. The federation itself, together with the unions, promoted several campaigns for fuel at a fair price for the people, this price being fair and that would also bring a large profit to the company in the amount of R$4.50, and cooking gas at a value that it would be around R$60, which may vary according to the region of the country, but it would still remain at a price below what we find today.

In this sense, working on taxes, even knowing that the tax burden in Brazil is high, we cannot link these prices to the value of the ICMS. What really needs to change is this pricing policy, which should not be linked to the dollar rate. This happens mainly in countries that are dependent on oil imports, which is not the case with Petrobras and Brazil, since we are oil producers, and from that we could be working with fairer prices for our people, and guaranteeing the company’s profit.

And about the ICMS, which we’ve been hearing a lot lately, does it really have any relationship with the increase in cooking gas and fuel prices?

ICMS, like other Brazilian taxes, is a percentage of the value that will come out of the refineries, so when the sale value of the refineries increases, the ICMS being a percentage based on this value, a higher value will be collected and that will bring a value to the pump. However, it is necessary to point out that it is not the main reason for this increase, in fact the increase in the value of fuel when it leaves the refinery is the main reason. And about ICMS, it is being voted in the chamber to modify the ICMS quotation policy, becoming a fixed amount in order to reduce these amounts, which is wrong, because, however much it remains fixed, Petrobras can increase the value of fuel at the refinery, causing the values ​​to continue to grow. Therefore, the main villain of this increase in the price of cooking gas and gasoline is actually the increase in fuel when it leaves the refinery, where it is linked to the international market, and not because of the fluctuation in the value of the ICMS.

And how do these values, especially the value of cooking gas, impact people’s lives?

This year’s inflation target has already been extrapolated. The score, which was around six, has already managed to beat nine, because almost all of our product distribution is by road, that is, diesel is needed to carry out these activities. So the increase in the value of diesel changes our entire production chain, and that is why the high prices of rice, beans, meat… Because all the transport of these inputs depends on road transport, and as long as diesel is with these absurd values, consequently all inputs will also be. On cooking gas, as mentioned above, we always campaign in communities and with this we observe that families either have money to buy food or have money to buy cooking gas. It is appalling to see the Brazilian worker having to allocate about ten percent of their salary to purchase cooking gas, so we are not only witnessing an economic impact, but also an impact on safety, starting to resort to the use of a wood stove, which compromises the safety of people and, in addition, a social impact as well.

As a union representative in this category, we are seeing hunger and unemployment on the streets of Brazil. Everything is absurd and the popular and union movements have been doing exceptional work. Lately we watched that video from Fortaleza, where people look for food in a garbage truck. We are following and observing all the impact that this pandemic and this government have been causing to the country, and we hope that, if not this year, but that next year we can be living in a better situation, happy and smiling again.

What are SindPetro’s fight agendas to reverse this situation in which Brazil lives?

In this situation, our main struggle is undoubtedly to reverse the privatizations, not only of Petrobras, but also of other categories such as postal services, but also together with other classes. We continue to fight for full employment, against hunger and unemployment.

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Source: BoF Ceará

Edition: Francisco Barbosa

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