Diesel price almost doubled during Bolsonaro government, points out Dieese

Last Thursday (5), President Jair Bolsonaro (PL) used social media to criticize Petrobras and fuel prices. Bolsonaro called the company’s profit (R$44.5 billion in the first quarter) “rape” and said the company could no longer raise the price, or “it would break Brazil”.

A change was approved a few days later and takes effect this Tuesday (10th), after Petrobras announced an increase in the price of diesel by 8.87%, which means a change of R$ 0.40 per liter of fuel. —from BRL 4.51 to BRL 4.91.

Unlike what happens with gasoline – which rose 67% in the years of the government – ​​the population does not feel the immediate effect after the announcements of increase, since most people do not use diesel to fuel their vehicles.

But, in the long term, the tendency is for this increase to be passed on to consumers, causing constant changes in prices in recent years to contribute to goods and services suffering from inflation.

“When it comes to the IPA, an index that measures inflation for industry and agriculture, diesel has an even greater weight than gasoline. That’s because the entire production process, from the operation of agricultural machinery to the logistics system. we consume has diesel as an input to some extent”, explains Carla Argenta, chief economist at CM Capital Markets.

Argenta uses the example of red meat consumption to illustrate the situation. “Diesel is not used on the cow, but on the agricultural machines that work in the pasture and transport that meat to you.”

Thus, even if it is not overnight, the costs must reach the population. “The pass-through is not necessarily one-to-one, there is a margin space for producers or those responsible for freight and part of the inflation can be diluted, but the increase is expected because profit margins are already compressed”, says Felipe Sichel, economist- head of Banco Modal.

In a note, Petrobras stated that the change occurred due to a reduction in supply in relation to demand. “Global inventories are low and below five-year seasonal lows in major supply regions.”

Government subsidies?

Economist Felipe Sichel points out that, now, the eyes of specialists are focused on the next possible moves by the government. “Now it is to see if somehow the government will try to soften this impact by increasing the subsidy.”

In his opinion, if it occurs, the effect could be negative. “With the extremely delicate fiscal situation in the global and local economy, there is little capacity to absorb shocks. Trying to soften now can generate worse inflation in the future, and as a rule, the faster prices adjust, the better the economy absorbs the shock and adapts. Making it difficult to absorb means that this bill has to be paid somewhere.”

According to Carla Argenta, one of the options would be to take the “royalties” from Petrobras, the company’s dividends destined for the Union, for the subsidy.

“It would have no impact on Petrobras’ pricing, and it could even be good for the investor who bought shares. But this should not be an alternative used by the federal government because these resources are already going to debt, which would result in public indebtedness.”