Senate approves bill to dampen fuel readjustments and create gasoline aid

On the day that Petrobras announced a mega-increase in fuel prices, the Senate approved this Thursday (10th) the project that creates a stabilization account to cushion readjustments and establishes guidelines for a new national pricing policy.

The text also doubles the scope of Auxílio Gás, paid to beneficiaries of Auxílio Brasil, and creates an aid of up to BRL 300 per month to help taxi drivers, app drivers and delivery men pay for gasoline costs.

The proposal was approved by 61 votes to 8, after successive postponements of the vote due to the lack of consensus around the text. Without separate requests for change (the so-called highlights), the text goes to the Chamber of Deputies for consideration.

The Ministry of Economy criticizes the stabilization bill because it imposes on the Union the cost of paying the bill to contain fuel prices.

The text creates a new fuel price policy, which must observe guidelines such as reducing domestic price volatility.

An account filled with excess dividends paid by Petrobras and income from royalties and special participations would be used to compensate producers and importers whenever the market price goes above the reference price – thus, the increase would not be passed on to the pumps.

Economics technicians see the stabilization account as a low-efficiency mechanism, since the fuel market is large, and its members can more quickly pass on readjustments given the certainty that the government will pay the difference.

Economic sources also see a risk to the spending ceiling, the government’s main fiscal anchor and which limits expenditure growth to inflation. To make disbursements from the stabilization account, the government might have to circumvent the ceiling.

In the last minute negotiations, the rapporteur, Senator Jean Paul Prates (PT-RN), also accepted a series of amendments to expand the scope of the project and allow the creation or expansion of benefits.

One of them is the aid of R$ 300 to taxi drivers, app drivers and pilots of small boats who have a family income of up to three minimum wages. Drivers qualified to drive mopeds or motorcycles of up to 125 cc would receive a lower amount of R$100.

The aid for these families to fill their vehicles with gasoline would be paid up to a limit of R$ 3 billion. The idea is to prioritize Auxílio Brasil beneficiaries.

Senator Eduardo Braga (MDB-AM), defender of the aid and who presented an amendment with this measure, said that Congress needs to adopt some initiative to mitigate the effects of the economic crisis and high fuel prices.

“It is essential that there is some measure of immediate effect to minimize the impacts of successive increases in the prices of gasoline, diesel and cooking gas”, said Braga.

Senators, however, differ on the implementation of this new benefit. The electoral law prohibits the creation of new social policies in an election year. Auxílio Brasil, for example, can only be paid because it has existed since the previous year, 2021.

The rapporteur said that the measure will respect the electoral law, which means that the new aid would only be paid in 2023. “, he said.

The government leader in Congress, Senator Eduardo Gomes (MDB-TO), said that consultations are still underway to verify the possibility of implementing the aid to drivers in 2022.

“We are analyzing the legal issue, the advisors, both from the government and the Senate”, said Gomes.

According to the leader, the government supports the creation of the benefit. But the economic team has resistance because there is no space in the Budget, in addition to the understanding that it violates the electoral law.

In the case of Auxílio Gás, the expansion should ensure that at least 11 million families receive the benefit. Created last year, Auxílio Gás now reaches 5.5 million families benefiting from Auxílio Brasil — the successor to Bolsa Família, a social program that was a hallmark of PT administrations.

The expense with the Gas Aid is currently R$ 1.9 billion. Doubling its reach would mean an additional expense of the same amount.

The Senate also approved another proposal, which changes the ICMS (Tax on Circulation of Goods and Services) on fuels and allows the Union to cut PIS/Cofins rates on diesel and gas. The project has aroused opposition from governors.​

Before the vote, the senators criticized the fuel increases announced this Thursday (10) by Petrobras. The company reported readjustments of 18.8% for gasoline and 24.9% for diesel.

“We are doing just the opposite. The opposition, the PT, the Senate are working. Petrobras is increasing fuel”, said the rapporteur Jean Paul Prates.

The leader of the MDB, Senator Eduardo Braga (MDB-AM), appealed to the government leader in Congress for the Executive to adopt some measure to avoid the increase before the Legislature votes on the proposals on the subject.

“I hope, leader, that, in light of everything that we have just said here and the effort we are making to understand, that the government can act, because just yesterday we mentioned that it was necessary for Petrobras to wait for the vote that would take place on the today,” he said.

Gomes avoided responding to his colleague’s request, but said that the discussions involving fuel prices represent “a tug-of-war dispute that both sides fall into”.