Voting on fuel bills in the Senate is postponed for the 3rd time

Amid growing pressure for measures to contain the rise in fuel prices, Senate President Rodrigo Pacheco (PSD-MG) has once again postponed the vote on legislative proposals that could reduce the price at pumps.

This is the third unsuccessful attempt to approve the bills in the Senate. The postponement took place at the request of the deputy leader of the government in the Senate, Carlos Vianna (MDB-MG), and was accepted by the rapporteur of the proposals, Senator Jean Paul Prates (PT-RN). Voting has been rescheduled for this Thursday (10).

The postponement of the vote takes place on the same day that President Jair Bolsonaro (PL) and ministers agreed to focus on the approval of PLP 11, which changes the collection of ICMS (Tax on the Circulation of Goods and Services) on fuels and exempts diesel and federal gas taxes.

The agreement had been a way for the Minister of Economy, Paulo Guedes, to buy time to try to minimize the pressures for the creation of a direct subsidy on the price of fuel – a measure defended by other ministers of the political wing of the government and that would be carried out with resources from the Unity.

Postponement can feed back that pressure. At Palácio do Planalto, there is already an assessment that the approval of the project in the Senate does not remove the need to implement subsidies to reduce the price at the pump more quickly.

Therefore, this hypothesis remains strong in the political wing, which credits Guedes with the fact that an action in this sense has not yet come to fruition.

The postponement of the vote took place despite Pacheco’s warnings about the delicate moment of fuel prices. “A situation that was already very bad has worsened considerably with the war in Europe,” he said.

The Senate president stated that the bill had already been “sufficiently debated” and the best way to know how the House thinks would be to vote on the text.

Even so, the rapporteur agreed with the government’s request. “We need a complete conciliation”, said Jean Paul Prates. The senator talks about new contributions from governors and that this will be “a last attempt to bring together the demands of all actors”.

According to the text of one of the projects, PLP 11, states will have the option of creating a single ICMS rate on fuels. But while this is not implemented by the governors, the tax on diesel and biodiesel will have to be levied on a defined calculation basis, obtained by the moving average of the last five years.

In addition, the text provides for a change in the rate model, from a percentage on the value to a fixed rate on the liter.

The rule, treated as a “transition”, would run until December 31, 2022.

The single rate, when implemented, should be applied to gasoline, diesel, ethanol, cooking gas and aviation keronnaise. Although unified among the states, the rates may be differentiated by type of fuel, according to the text.

In the view of the Economy, the change would ease the rise in prices. The governors are against it due to the loss in revenue.

The Planalto also wants to include the exemption of PIS/Cofins from diesel and gas in the proposal – a request that the rapporteur has already signaled that he will comply. The measure generates a waiver of R$ 18 billion in the Union’s accounts.

Another project, PL 1472, provides for the creation of a price stabilization account, supplied with dividends paid by Petrobras to the Union, in addition to income from royalties and special participations.

The money would be used to fund a price volatility reduction policy. Economics, however, is against this proposal.

Hours before the postponement of the vote, the leader of the MDB in the Senate, Eduardo Braga, asked Guedes to revise the decree that promoted a linear cut of 25% in the IPI (Imposto sobre Produtos Industrializados) and alleviated the tax burden on products such as cars, fridge, TV and cell phone.

As shown in the Panel column, he requested the creation of exceptions to the decree to exclude products that are produced in the Manaus Free Trade Zone. Companies installed in the region already have IPI exemption for their products and lose competitiveness with the reduction of tax on others, especially imported ones.

Although he avoided directly linking the two negotiations, IPI and fuel, Braga was already signaling that the voting on the projects could be postponed.

“There are some adjustments that need to be made, the rapporteur himself should now in the plenary ask us to postpone until tomorrow [quinta-feira, 10] or Tuesday the vote”, said the senator, before the official announcement of a new date for consideration.