Find out what other countries do to hold down fuel prices

The increase in the price of oil and its effect on the price of fuel and energy has caused a wave of containment measures around the world: governments are cutting taxes on the commodity at a time when public opinion was sensitized towards the use of fossil fuels, one of those responsible for the climate crisis.

Part of the increase is due to numerous Western sanctions on Russia after it invaded Ukraine in late February. Many of the punishments spill over into the production and export of the commodity: Russia is one of the three largest oil producers in the world.

US Senator Chris Coons gave new contours to the case in an interview with CNN on Tuesday (8). According to the Democrat, the White House is expected to announce a ban on US oil imports from Russia by Wednesday (9). Russia, for its part, is threatening to cut off the gas it exports to Europe.

“The last thing governments want to do is increase any subsidies for fossil fuels, but you have to be sensitive about the price shock,” Ben Cahill, a senior fellow at the Energy Security and Climate Change Program at the Center for Strategic Development, told Reuters. and International Studies. “It’s an economic problem that we have to deal with today.”

Although the war in Ukraine has worsened the situation, the tax cuts, as well as price increases, predate. In Brazil, the president of the Senate, Rodrigo Pacheco (PSD-MG), announced last week that he put on the voting agenda of the House that commands the package of bills that seeks to reduce the price of fuel.

One of the projects, 1472/21, provides for the creation of a stabilization fund to dampen fluctuations in fuel prices — since the Temer government, values ​​are internationally matched. The sources of financing would be revenues from oil royalties, special participations and dividends paid by Petrobras to the Union.

The other, complementary bill 11/2020, changes the rule on ICMS (state tax) on fuels and provides for the tax to be applied on the average value of the last two years to lower the price of gasoline.

See some examples of measures in relation to the price of oil around the world.

Mexico

Months after inflation in the country hit 4.67%, in April — hitherto the highest rate in more than two years — the country set maximum gas prices. Since August 2021, every Saturday the Energy Regulatory Commission of Mexico sets the limit value of the product according to the costs of each region. The measure was a priority of President Andrés Manuel López Obrador.

United States and allies

At the beginning of last week, the International Energy Agency, linked to the OECD (a kind of “rich countries club”), released 61.7 million barrels of oil to try to balance the price of the commodity after the war. Almost half, 30 million, was provided by the United States. South Korea released 7.5 million and Germany 3.2 million.

Portugal

Since November last year, the Portuguese can use the Autovoucher to reduce fuel costs. The measure, approved in October last year by the country’s parliament, allowed a discount of 10 cents per liter of fuel. The limit amount to use the benefit was 50 liters per month for each citizen, which resulted in a maximum discount of 5 euros. The war in Ukraine, however, increased that limit to 20 euros from this month.

Spain

Amid increases in the country’s electricity bill, the government approved energy-related tax cuts in June last year. The VAT (Value Added Tax), the main consumer tax in Spain, went from the usual 21% to 10% when applied to light, and the tax on energy generation, of 7%, was suspended. The measures, which would be in vogue until the end of last year, were extended until July at the beginning of March.

Italy

On September 27 of last year, the Italian government issued a decree with “urgent measures to contain the effects of price increases in the electricity and natural gas sector”. The Value Added Tax on gas for civil and industrial use has fallen to 5%.

England

In February this year, the government announced that it will provide discounts of up to £350 on the energy bills of 28 million households from October, when, they estimate, the price of energy will be even higher. The idea is that from 2023 the subsidy will be recovered with automatic additions of 40 pounds per month to the account of each family that has accessed the benefit.

Belgium

With an energy package that is expected to reach 1.1 billion euros, the Belgian government approved on February 1st the reduction of the electricity tax from 21% to 6% —a measure that should last from March until June this year— and a social benefit of 100 euros.

thailand

On February 15th, the Thai government decided to reduce the tax per liter of diesel by 3 baht (R$ 0.46) for three months. At the time, the rate was at 5.99 baht. The cut is expected to reduce the country’s revenue by 17 billion baht (R$2.6 billion), which should be partially offset by the increase in other tax revenues.

Japan

Last week, Japanese Prime Minister Fumio Kishida approved measures to cushion the rise in fuel prices from the war in Ukraine. One was to raise the subsidy ceiling for gasoline, diesel and kerosene to 25 yen (R$1.09) per litre.

With Reuters and AFP