Under Bolsonaro, diesel and gas cylinder prices soared

Even with federal and state tax cuts, diesel and gas cylinder prices soared in the four years of the Jair Bolsonaro government, which end this Saturday (31). Gasoline was more impacted by the ICMS reduction and ended the period cheaper than in December 2018.

According to the price survey by the ANP (National Agency of Petroleum, Gas and Biofuels) released this Friday (30), the average price of gasoline at Brazilian service stations ends the year at R$ 4.96 per liter, practically up from 0 .6% compared to the previous week.

It is 9.5% less than the R$ 5.48 in force in the last week of December 2018, in values ​​corrected by the IPCA (Extended Consumer Price Index), the official inflation indicator.

The drop reflects the tax cuts approved by Congress in June, to contain the escalation that led to the price of fuel being sold at an average price above R$ 7 per liter between March and July this year.

President-elect Luiz Inácio Lula da Silva (PT) is considering maintaining the exemption of federal taxes, which represent R$ 0.77 per liter. If you do not renew the measure, the consumer will already start to feel the high next week.

Consultant Dietmar Schupp, a specialist in fuel taxation, estimates that the average price of gasoline will rise 14.1% with the return of taxes. In some states, the high can reach 15%.

With a lower tax burden than gasoline, diesel and bottled gas prices suffered less impact from tax cuts and close the government above the values ​​practiced in the last week of 2018, even considering the inflation of the period.

According to the ANP, a liter of diesel was sold this week at R$ 6.25, down 0.4% compared to the previous week and 43.3% above the R$ 4.36 in force the week before the start of Bolsonaro’s term.

At that time, the amount was subsidized by the government, as an agreement to end the truck drivers’ strike. In January 2019, with the end of the subsidy, Petrobras raised the price by BRL 0.05 per liter in its refineries, but there was no significant transfer to the pumps.

The price of hydrated ethanol rose 8% in the Bolsonaro government, already considering the inflation of the period, from R$ 3.58 per liter in force in the last week of 2018 to R$ 3.87 per liter this week.

The 13-kilogram gas cylinder, which today has an average price of R$ 108.64, cost R$ 87.44, in an amount corrected by the IPCA in the last week of December 2018. It had, therefore, an increase of 24, 2% during the Bolsonaro government.

Another fuel that had a strong rise in the period was CNG (vehicular natural gas), which went from R$ 3.85 to R$ 4.72 per cubic meter, up 22.5%. Fuel is widely used by taxi drivers and app drivers, especially in Rio de Janeiro.

Part of the rise in fuel prices is explained by the rise in oil prices, combined with the application of a price policy that provides for parity with the international market, which should be reviewed by the new government.

At the end of 2018, Brent oil, an international benchmark traded in London, was trading at around US$55 per barrel. This Thursday, it closed at $83.46. In the first half, it was traded above US$ 100 as a reflection of the Russian invasion of Ukraine.

But the exchange rate also had an influence: the dollar exchange rate ended 2018 at R$3.87, the equivalent today of R$4.89 when corrected by the IPCA. This Thursday, the last trading session of 2022, it closed at R$5.28.

The rise in fuel prices had a strong impact on the popularity of Bolsonaro, who spent almost his entire term in conflict with the direction of Petrobras, even dismissing three presidents of the state-owned company in four years.

The situation only improved with the appointment of Caio Paes de Andrade, who benefited from the drop in international oil prices and adopted a strategy of announcing drop-in price cuts during the electoral period, generating positive news for the campaign for the re-election of the president.