Government studies measures to ensure that stations pass on subsidies to consumers

Willing to open the Union’s coffers and allocate R$ 46.4 billion in resources to subsidize fuels, the Jair Bolsonaro (PL) government now wants to seek distributors and resellers to ensure that price relief will be passed on to consumers.

The fear of members of the Executive is that companies operating in the chain will appropriate part of the tax cut, expanding their profit margins. Simulations presented to the National Congress indicate that the exemptions could mean a reduction of R$ 0.76 in the liter of diesel and R$ 1.65 in gasoline.

Members of the government and Congress should meet in the coming days with representatives of the ANP (National Agency for Petroleum, Natural Gas and Biofuels), distributors and service stations to discuss the matter.

The fuel sector will not be the first to hear the government’s calls to hold on to profit margins and help control inflation. This Thursday (9), Bolsonaro and Minister Paulo Guedes (Economy) asked entrepreneurs in the supermarket sector to hold down the prices of the basic food basket, for example.

Inflation scares Bolsonaro’s allies, who are looking for ways to bring relief to the population’s pocket under penalty of jeopardizing the president’s reelection project. The IPCA, the official price index, has accumulated an increase of 11.73% in the 12 months through May.

The menu of options includes possible measures to reinforce provisions of the Consumer Protection Code, such as the requirement to establish, in a visible place at gas stations, the prices practiced before and after the measures adopted.

The government’s view is that consumers can act as a kind of price inspector, to ensure that relief is passed on.

The president himself has already told that he has asked truck drivers to help monitor whether the stations are passing on price relief or are increasing their profit margins.

“Today I started talking to truck drivers, everyone, to photograph fuel pump panels there. Why, when and if the PEC is enacted [proposta de emenda à Constituição]sanction the bill [projeto de lei]the reduction is already for the next day”, said Bolsonaro on Tuesday (7), in an interview with SBT.

The reduction of taxes is the government’s bet to lower the price of fuel, whose rise is seen by members of the president’s campaign as the main obstacle to his reelection.

Another initiative under study involves the ANP price registration panel, obtained through a survey carried out by a company contracted by the agency through a bidding process. The research presents weekly the minimum, average and maximum prices charged by distributors and gas stations.

Within the government, however, there is an assessment that the panel is underused and that there is room for the agency to act more incisively in this area, including increasing the frequency of research dissemination.

The package announced last Monday (6th) includes the exemption of federal taxes on gasoline and ethanol, in addition to a compensation of up to R$ 29.6 billion to the states in exchange for zeroing the ICMS (Imposto sobre Circulation of Goods and Services) on diesel and gas until the end of the year. State governments would also need to reduce the ethanol tax percentage to 12%.

Parliamentarians allied with the government estimate that the approval of the proposals could take place in two weeks. Speed ​​in the process is considered crucial for Bolsonaro to have a chance to capitalize on the effect on the bombs in his election campaign.

Even so, the Brazilian may still take some time to feel some relief in his pocket, according to technicians in the economic area. This is because fuel taxes are paid at the distribution stage, not at the gas stations.

Any change will only take effect when the dealer (gas station) receives a new shipment of the product invoiced at zero tax. The effect, therefore, is not immediate.

The government leader in the Senate, Carlos Portinho (PL-RJ), says it is the ANP’s obligation to inspect gas stations and pump prices. He claims to have suggested to the agency’s command the use of an application to assist in the task, also allowing interaction with users.

“I had already talked a while ago with the ANP. I think that today it has to use technology in its favor. The consumer is the best tax, without a doubt”, he says. He cites as an example the traffic applications, in which the user can inform in real time the occurrence of traffic jams or accidents, at the same time that he can decide the best route.

“Today, with technology, he can, with a Waze-like system, [informar] in real time the ANP [para] have the price of fuel by state and guide the consumer to switch to the cheapest gas station”, says the leader.

In February last year, already in an arm wrestling with governors over the blame for the increase in fuel, the federal government issued a decree to oblige gas stations to disclose clearer information on the composition of prices, including detailing the value. of state taxes.

Government officials, however, privately admit that the structural solution to the rise in prices would be the end of the war in Ukraine, as the conflict has been a factor in boosting oil prices.

The big problem is that the fuel adjustments end up spreading to other products consumed by Brazilian families, including food, since a large part of cargo transportation in Brazil is done by diesel-powered trucks.

Faced with the difficulty with inflation, the government has directed pressure to entrepreneurs. On Thursday (9), Bolsonaro and Guedes asked supermarket owners to hold back the prices of the basic food basket. The chief executive said that “in difficult times” everyone needs to “collaborate”.

“I know that the profit margin has been decreasing more and more. You have already collaborated in this sense, but collaborate a little more in the profit margin of the products of the basic basket”, he said. “If it is answered, I thank you very much; if it is not, it is because it is not possible.”

Guedes already asked for a “truce” in the price adjustments applied by supermarkets. “Now it’s time to put a stop to this rise in prices. It’s voluntary, it’s for the good of Brazil,” said the minister.

Representatives of Fecombustíveis (National Federation of Fuel and Lubricants Trade), which represents the country’s gas station unions, are scheduled to travel to Brasília next week to meet parliamentarians.

According to the president of Fecombustíveis, James Thorp, the objective is to carry out an act in support of tax cuts. The invitation to travel was made by the presidency of the Chamber.

Measures under study

• Force stations to disclose price comparisons before and after measures taken

• Increase the frequency of disclosure of average prices collected by the ANP to encourage inspection by consumers