Gasoline prices would have to halve to be among the 20 cheapest in the world

With the accumulated drop in recent weeks, the price of Brazilian gasoline has advanced in the ranking of the cheapest in the world, but it is still far from reaching the top of the list, as President Jair Bolsonaro (PL) said this Tuesday (19).

According to the website Global Petrol Prices, on Monday (18) Brazil occupied the 44th position in a ranking of 169 countries, with gasoline being sold, on average, at US$ 1.12. The previous week, the site’s list brought the country in 47th place.

The advance is the result of federal and state tax cuts at the end of July, which have already caused an accumulated drop of 17.8% in the average selling price of fuel, according to a weekly survey by the ANP (Agência Nacional do Petróleo, Gás and Biofuels).

The trend is for the downward cycle to continue, especially after the reduction in the price charged by Petrobras at its refineries, which took effect this Wednesday (20th). With a 4.9% cut in the refinery price, the state-owned company estimates an impact of R$ 0.15 per liter at the pump.

“Brazil will soon have one of the cheapest ‘gasoline’ in the world”, celebrated the President of the Republic on a social network.

To be among the 20 cheapest in the world, however, the value of Brazilian gasoline has to fall by half, reaching the US$ 0.62 of Saudi Arabia, the 20th place in the Global Petrol Prices ranking.

If the transfer of R$ 0.15 per liter expected by Petrobras reaches the pumps in full, for example, Brazil could gain two or three positions, depending on the behavior of the exchange rate in the coming days.

Although gasoline is an international commodity, its final price varies greatly from prices around the world, according to tax burden factors and pricing policies in different countries.

The Global Petrol Prices ranking is also heavily influenced by the exchange rate, as it converts values ​​in local currency to the dollar. With a devalued currency and subsidies to the product, Venezuela appears leading the list, with gasoline at US$ 0.02 per liter.

The top of the ranking is made up mostly of large oil-producing countries, which also tend to charge low taxes on fuel.

European countries, on the other hand, tend to have a high tax burden and appear in the middle to the bottom of the list. Among the member countries of the European Union, Malta has the cheapest gasoline, with an average price of US$ 1.37 per litre.

Although the tax cuts have the potential to guarantee a positive impact on inflation and relief to the consumer’s pocket in the coming months, the effects will be limited in the medium term, as they are only valid until December.

The law passed by Congress provides for the return of PIS/Cofins on gasoline in January 2023. Until the law was passed, the two taxes cost consumers R$ 0.69 per liter.

There are still uncertainties about how the ICMS collection will be, as states question in the STF (Federal Supreme Court) a law that changed the tax collection model, creating a single rate in reais per liter.

In the diesel price ranking, Brazil occupies the 80th position, with an average price of US$ 1.38 per liter. The government has been struggling to make the product cheaper, which already had zero federal taxes and ICMS rates below the ceiling in most states.