Opinion – Vinicius Torres Freire: Diesel price is the highest of the century, but sales hit record

Never has as much diesel been sold in a first quarter as in this 2022, at least since 2000, when there are comparable numbers. Sales are almost 7% higher than in early 2020, before the epidemic, and 9% higher than in 2019. The price of fuel, in turn, has never been higher in at least a decade, in real terms.

In less abnormal times, it would not be surprising. The population grows; the truck fleet increases significantly, according to statistics from the National Land Transport Agency or Denatran. Even the economy’s output, GDP, has returned to its 2020 level, perhaps a little more.

The big difference is the price. A resource for thinking about the cost is to verify how much was lost in fuel purchasing power. For example, consider how much the average salary buys liters of diesel, for example. In the first two months of this year, the average monthly income from work purchased 31% less diesel than in 2020 and 33% less than in 2019.

It’s a stick. But you buy more diesel, even at that price. It is reasonable to speculate that those who use diesel as an input, such as fleets of trucks and the like, are managing to pass on the increases. Of course, it is in the prices of food and transported cargo in general, in the average inflation (in the IPCA).

If the diesel subsidy (tax reduction) has any effect, it is small, for so much confusion and problem (cheap pollutants, increase public debt, pay more interest to the richest, intervene in prices, etc.). Worse still, the subsidy, the loss of government revenue, benefits both rich and poor, in roughly proportional terms. Does not make sense. If the government is going to spend or not collect, in a situation of serious social and economic crisis, on top of that, it has to be with the poorest.

The consumption of LPG (bottle gas for the kitchen) in the first two months of this year fell in relation to the beginning of 2020, around 1.5%. The purchasing power of the average salary in terms of LPG fell by 29% from 2020 to 2022. It is the lowest in a decade. Apparently, those who depend on bottled gas are doing worse than those who depend on diesel, on average.

The gas voucher helps remedy the situation. But the main problems are the economic depression, the worst inflation in nearly 20 years and insufficient minimum income programs.

The consumption of regular gasoline also increased in this two-month period, even with a record price in the decade (for this period of the year). It’s 5% higher than at the beginning of 2020, although it hasn’t been a record since 2000 like diesel (it’s the highest since 2018). The purchasing power of the average wage in terms of gasoline has fallen by 28% compared to 2020.

But there is a bit of illusion here. The consumption of hydrated ethanol, the “alcohol at the gas station”, fell sharply (41%), as the fuel prices do not compensate, if compared to the generally immediate alternative, gasoline. The consumption of regular gasoline and hydrous ethanol is still almost 12% lower than at the beginning of 2020.

Crashing Petrobras’ finances will make little difference to the price and cause collateral economic damage. In the short term, all that remains is to wait for the end of the war, a more well-behaved price per barrel and for the dollar to fall by a bit. And it is worth remembering that, between 2016 and 2020, “with an international price, with everything”, gasoline was relatively cheaper than in the epidemic and much more than now. It depends on the price of oil, the dollar (a better government helps with that) and whether there is a salary. Otherwise, it is to expect a miracle, which the candidates for the Presidency of the Republic continue to advertise.