Future of Petrobras’ fuel pricing policy divides pre-candidates

Petrobras’ policy on fuel prices — whose successive increases have been reflected in drivers’ pockets and in inflation — divides pre-candidates for the presidency and should be up for debate until the October election.

The so-called PPI (Import Parity Price) was implemented in 2016, during the Michel Temer government (MDB) and during the management of former Petrobras president Pedro Parente.

The policy was maintained by Jair Bolsonaro (PL), and the current president of the company, Joaquim Silva e Luna, recently defended that the oil company has to practice market prices and cannot make public policy.

Leader in the polls, former president Lula (PT) has the opposite opinion. He has been saying that there is no reason for fuel prices to be internationalized.

On Thursday (3), in an interview with a radio station in Paraná, PT reaffirmed that he intends to end the policy that forces the oil company to pass on the readjustments according to the international market.

“We are not going to keep the price of gasoline in dollars. It is important that the shareholder receives dividends when Petrobras makes a profit, but I cannot enrich the shareholder and impoverish the housewife, who will buy beans and pay more for gasoline.”

The former president added that it is necessary to govern for all, but prioritize those who need it most. According to Lula’s adviser, the politician is in favor of a solution for fuel prices that reflects the national cost and that idle refining capacity is used.

In second place in polls of voting intentions, Bolsonaro has been fighting a dispute with the governors, associating the rise in prices with the increase in state taxes, such as the ICMS (Imposto sobre Circulação de Mercadorias e Serviços).

Bolsonaro has also exonerated himself of blame for the successive increases, saying that the price policy is the result of mistakes by past governments. “Does anyone think that, if the criminal returns here, he will return gasoline to R$3? He has already done so in the past, which increased your indebtedness,” said the president during an event with Petrobras employees, in reference to Squid.

At the same time, the Palácio do Planalto prepared a PEC (proposed amendment to the Constitution) that allows the reduction of taxes on fuels and handed it to a deputy from the base to be filed in the Chamber.

Former minister Sergio Moro (Podemos) defended at an event last week that the privatization of Petrobras and other public companies, such as Banco do Brasil and Caixa Econômica Federal, should be considered without prejudice. “If you can privatize everything, great.”

According to the former judge, it is possible to find palliative solutions for the rise in prices, but the cause, which is the loss of credibility and trust in Brazil, needs to be addressed.

“If we don’t control inflation and don’t reduce the dollar, it won’t solve the problem. And it’s necessary to encourage market competition. Another step is to discuss, in a permanent way and with fiscal responsibility, the reduction of taxes.”

Regarding the possible maintenance of the current price policy, the former minister says that he cannot anticipate what is being discussed with the economic coordination of his pre-campaign.

In videos posted on his YouTube channel, former minister Ciro Gomes (PDT) stated that he would change the pricing policy on the first day of an eventual government. “I will announce the purchase of shares from dissatisfied shareholders, which will be done as carefully as possible, preserving the collective interests and balance of the company.”

Ciro says that a special financing model will be created, using a part of the country’s international reserves, as a kind of loan to the government.

He defends the replacement of the PPI by a new index called PPE (Export Parity Price), which would be an average considering the exploration, production and refining cost plus the diesel export price from Brazilian refineries and the price of diesel in the northern refineries. -American

“Brazil pays prices for fuel as if we didn’t have a drop of oil in our subsoil, nor refineries. I will neither be an explorer, like Bolsonaro, nor a spendthrift, like [o ex-presidente da Venezuela] Hugo Chavez.”

An economic consultant for Ciro’s 2018 campaign, Professor Nelson Marconi, from Fundação Getulio Vargas (FGV), says that the company’s privatization proposal would increase the problem.

“The logic will be the same as today and we would lose control of a strategic input that other countries do not give up. If this model is implemented, what will prevail is profit maximization.”

In the assessment of the governor of São Paulo, João Doria (PSDB), domestic prices should maintain parity with international prices and artificialities harm Petrobras and send bad signals to investors.

“It is important to highlight that part of the pressure on domestic fuel prices stems from the government’s loss of credibility, and the rise in these prices could have been offset by the weakening of the dollar. From a structural point of view, the sale of Petrobras refineries to insert more competition in the sector and encourage investments”, he said in a note.

Also according to the toucan, it is necessary to include formats that smooth out price variations, especially in diesel, gasoline and bottled gas.

In the view of Maurício Canêdo, professor at FGV Energia and UERJ (University of the State of Rio de Janeiro), there is no right or wrong option, only choices that society is willing to make to bear the costs.

“The current policy is basically the prices that would apply if Petrobras were private or if refining were entirely private. The only thing that would change would be no more pressure on the government to change prices.”

He recalls that, before the PPI, there was no objective pricing policy, and Petrobras decided through its main shareholder, the Federal Government. At various times, the price of gasoline and gas were detached from international prices.

“We can make a specific policy for the poorest families that cannot afford to buy cooking gas. It is not possible to do this on a large scale, with gasoline and diesel. cost did not exist.”

• WHAT IS PRICE PARITY?

The PPI (Import Parity Price) was implemented in 2016. It was a response to the previous policy of price control, practiced most prominently during the presidency of Dilma Rousseff (PT)

The PPI reflects the costs of internalizing the product — it considers the purchase price of the fuel (generally with reference to what is negotiated in the United States), plus the logistical costs and risk remuneration margins of the operation

• HOW DOES INTERNATIONAL PRICE AFFECT THE CONSUMER?

When the price of a barrel of oil rises abroad and the real depreciates against the dollar, as it is now, fuel becomes more expensive for Brazilian consumers.

• WHAT DO CRITICS SAY?

Critics say international parity hurts consumers and benefits shareholders. Last year, the company paid R$ 62 billion in dividends, while fuels were the great villains of inflation in 2021