Guedes already admits diesel subsidy if war continues

Minister Paulo Guedes (Economy) ruled out this Thursday (10) changing Petrobras’ pricing policy, on the day the company announced a mega-increase in fuel prices. For the first time, however, the minister admitted that subsidies from the National Treasury could be adopted for diesel if the war in Ukraine continues.

“We will move according to the situation,” he said. “If that [guerra] resolved in 30 or 60 days, the crisis would be more or less addressed. Now, is this going to rush and turn into an escalation? Then you start thinking about subsidy for diesel”, she said.

Guedes said that the compensation account for fuel prices, approved this Thursday by the Senate and which provides for the use of resources such as oil royalties, will be a tool to be used in case of need – but he discarded the instrument at this point.

“It’s just a tool. What is being said is the following. If this war lasts three or four months, six months? If oil is at US$ 140, US$ 150, US$ 160, how would we react?”, he asked. . “The Senate is saying ‘here is a tool if you ever need it’. Each one will propose a way to use this tool if the war escalates, but it’s just a tool and it’s not on our action map,” he said. .

For the minister, the first shock of the diesel war will be mitigated by the tax changes being discussed in Congress and in the government, which will demand both state resources (from R$ 15 billion to R$ 16 billion) and federal (from R$ 19 billion ).

On the state side, the bill that changes the collection of ICMS (Tax on Circulation of Goods and Services) was approved this Thursday by the Senate. The minister even thanked the parliamentarians for their endorsement of the text – which was a priority for the economic team.

Another initiative to soften prices will be the PIS/Cofins tax cut for diesel, which is also in the project approved by the Senate. With the two changes promoted by the text (in ICMS and in PIS/Cofins), the estimate is that about two thirds of the fuel readjustment (that is, R$ 0.60) will be absorbed by the tax changes — and one third will be felt by the population.

“We reacted correctly and each one is doing its part. Petrobras is making its readjustments, the federal government insisted on mitigating by contributing R$ 0.33 and the state governments [estão] contributing R$ 0.27”, he said. “For now, the idea is as follows. The first shock was absorbed. Now let’s observe,” she said.

When asked if the measures also influence gasoline, Guedes denied it. “What has been approved so far is exactly to mitigate the impact of diesel. Brazil runs on diesel. Food, transport, medicine, everything goes through the highways and we want to mitigate”, he said.

The statements were made after a meeting with his colleague from Esplanada Bento Albuquerque, Minister of Mines and Energy. The meeting was held on the same day that Petrobras announced readjustments of up to 24.9% in gasoline, diesel and cooking gas.

Asked if the government is discussing changing Petrobras’ pricing policy, both Guedes and Albuquerque ruled out. “We never thought of changing Petrobras’ pricing policy. This is a law,” said the head of the economic team.

According to Guedes, recent statements by President Jair Bolsonaro (PL) going in the opposite direction and criticizing Petrobras’ pricing policy should be seen as natural. “He worries and says ‘what is this business, what’s going on?’. Absolutely natural. And everyone has a remedy for the future. In the short term, that’s it,” said the minister.

Albuquerque added that it is not possible to change Petrobras’ pricing policy by the desire of the members of the Executive. “This is not the will of government A, B, C or D, this is a market law. The price is the result of the availability of the product and what exists today is a shortage of fuel, in particular diesel and liquefied gas from oil”, said the Minister of Mines and Energy.

Albuquerque reiterated that Brazil is dependent on refining imports for around 30% of its consumption. “This is what, in one way or another, drives up the price of products,” he said.

After a record profit of R$ 106.6 billion recorded by Petrobras in 2021, a “collaboration of the shareholders” of the company was evaluated by the government to minimize the effects of the oil price on the price at the pumps. But this exit lost strength shortly after being suggested and impacting the market.

The price of fuel is a priority for Bolsonaro and his allies, who fear the impact on the elections and have been seeking different initiatives on the subject for months.

The rise in oil prices due to the war in Ukraine made the political class increase pressure on the Ministry of Economy for solutions, but Guedes’ team resisted the idea of ​​using public coffers.

The hope was to wait for Congress to decide to cut fuel taxes, something that Guedes sees as a more rational solution in the face of increased revenue. Now, however, the use of subsidies gains traction if a continuation of the war pushes prices to even higher levels.