STF approves agreement to end the ICMS impasse, and gasoline may rise


The plenary of the STF (Federal Supreme Court) unanimously approved an agreement that seeks to end the impasse between states, the Federal District and the Union regarding ICMS on fuels, after a federal law sanctioned in June created a ceiling for the tribute, causing a breach in the accounts of federal entities.

But the agreement, which does not consider gasoline an essential item, excluding the tax ceiling for this fuel, may raise costs for consumers at service stations, if states come to establish a higher rate of ICMS to recover revenue losses. According to the pact, diesel, natural gas and cooking gas were maintained as essential.

The agreement came after a law sanctioned by Jair Bolsonaro (PL) in the middle of the year —in the face of large mobilizations in search of measures to alleviate a rise in fuel prices— was considered unconstitutional by states, which took the case to the STF.

The text of the federal law did not set a rate for the ICMS charged, but limited the incidence of the tax to approximately 17% by stamping them as “essential”.

Among the points agreed between the parties is the maintenance of the essentiality of diesel, natural gas and cooking gas (LPG), but gasoline was left out, which could impact the hydrous ethanol market, a competitor of fossil fuel , which always had a tax advantage on ICMS, but lost part of it with this year’s law.

“Considering that the average rate in Brazil for diesel oil is around 15%, in theory, there should be no increase in the current tax burden”, said Raion Consultoria, in a note to clients.

On the other hand, the gasoline tax should be freer and consequently favor the ethanol market.

“Since this is the ratification of an agreement, the next step is to wait for the Confaz Agreement to assess the possible impacts inherent to diesel oil through changes in its ICMS tax burden. As for gasoline, even due to its possible definitive exclusion from list of essential items, a significant increase in pump prices is expected in January,” said Raion.

The coordinating partner of the Tax area at Silveiro Advogados and professor at the Federal University of Rio Grande do Sul, Cassiano Menke, agrees that the trend is for gasoline to be a more expensive fuel with the change.

“For a simple reason, because the rate will be higher,” he said.


In the agreement, the states undertook to publish, through Confaz (National Council of Finance Policy) within 30 days, an agreement to establish the uniform national and single-phase ICMS, levied only once, for diesel oil.

Currently, each state has a different charge and the tax is levied at different stages, from the refinery to the distributor, from the distributor to the resale and from the resale to the consumer.

For Menke, the agreement should bring “legal security in the first place, because we will know clearly how much will be paid in any state”.

“Still within legal certainty, the discussion of presumed price and real price sold at the pump, which always generated additional payment”, he pointed out, explaining that in the old system the tax was paid at the refinery based on a price presumed, which then needed to be compensated in subsequent phases.


The STF also said that to provide legal certainty to taxpayers of ICMS on fuel, the states and the DF expressly waived the possibility of charging unpaid differences by taxpayers, due to the artificially created non-compliance by the average of the last 60 months in another law published this year.

The distortion was created because the federal government determined this year by law that the calculation for the presumed price, which previously took into account more current fuel values, would now consider the last five years, reducing the amount of ICMS to be charged in a first phase, but increasing the compensation that would have to be paid at the end of the chain, when the real price was established, explained Menke.

This year, prices rose due to international issues, such as the War in Ukraine.

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