Oil and gas sector criticizes proposal to tax oil exports

The IBP (Brazilian Institute of Oil and Gas) said on Sunday (19) that it does not support price controls in the fuel supply chain or the creation of charges on oil exports.

The demonstration by the institute, which represents companies in the oil and gas sector, came after the opening of yet another offensive by President Jair Bolsonaro (PL) and parliamentarians against Petrobras. Political pressure has a backdrop of rising fuel prices on the eve of the elections.

On Friday (17), Petrobras announced a readjustment in the prices of gasoline and diesel at refineries, which angered Bolsonaro and his allies, who fear the impacts of inflation amid the electoral race.

In this context, the government and parliamentarians intend to discuss measures to contain the fuel boom, and one of the initiatives being considered is to tax oil exports.

“The IBP does not support price controls in the supply chain or the creation of liens on oil exports,” the institute said in a statement.

The statement defends measures such as maintaining Petrobras’ divestment program, “broad” tax reform and social programs focused on the “most sensitive sectors” to rising prices, such as truck drivers, app drivers and families receiving aid to purchase gas.

Bolsonaro even said that the increase in gasoline and diesel was a “betrayal to the Brazilian people”. He also indicated an articulation with the leadership of the Chamber of Deputies to create a CPI (Parliamentary Commission of Inquiry) to investigate the direction of the state-owned company.

“Because we want to know if there is something wrong with their conduct. It is inconceivable to grant a readjustment with fuel up there and with the exorbitant profits that Petrobras is making,” Bolsonaro said on Friday.

The president of the Chamber, deputy Arthur Lira (PP-AL), told the Sheet that “goes to the dick” to “review all prices” of fuel. The congressman reported that he will work to tax Petrobras’ profits.

Leaders in the Chamber also want to debate the idea of ​​taxing oil exports. The resources collected from the tax, which is not collected today, would be used as subsidies to reduce diesel, according to one of the authors of the proposal, Deputy Danilo Forte (União Brasil-CE).

Petrobras’ current pricing policy takes into account oil prices on the international market and exchange rate variations. Specialists, however, say that the most recent adjustment was not enough to close the gap in relation to international values.

“It is necessary to reinforce that the price of fuel is not a variable of choice for a particular company, but the result of global supply and demand,” the IBP said on Sunday.

In the institute’s view, the alignment with the international reality is a “fundamental element” to guarantee investments in the sector, competitiveness of companies and “adequate offer” of products in the domestic market.

Congress has already completed voting on a bill that establishes a ceiling for ICMS tax rates on fuel, one of the government’s bets in the electoral race.

Parliamentarians must still debate the so-called PEC on Fuels. The proposal authorizes the government to zero federal taxes on gasoline and compensate states that decide to reduce ICMS on diesel and cooking gas.

“The recent measures, in good time, approved by the National Congress and with the support of the Executive Power, which promote tax reductions on petroleum derivatives and biofuels, are important signs and show that national political leaders are on the right path in pursuing tax simplification and introduce greater competitiveness in the production chain, with benefits for the market and society”, said the IBP.