Government anticipates and issues MP authorizing direct sale of ethanol

The President of the Republic, Jair Bolsonaro, issued a Provisional Measure that aims to anticipate the applicability of the innovations recently introduced by MP No. 1.063, of August 11, 2021, which allows for the direct sale of ethanol and makes the so-called “guardianship to the flag” more flexible. , in addition to including the ethanol production or marketing cooperative and the ethanol trading company (ECE) in the marketing chain, so that they can also sell ethanol directly to the retailer.

By the current standards of the National Agency for Petroleum, Natural Gas and Biofuels (ANP), stations that choose to display the trademark of a distributor, called “flags”, are prohibited from selling fuel from another distributor other than the brand shown. MP nº 1.063, of 2021, puts an end to this prohibition, allowing new business models between service stations and distributors and increasing competitiveness in the sector. However, the new rule would only take effect after the ANP regulates its application, which received a period of 90 days to publish the regulation.

However, the General Secretariat of the Presidency says that in view of the potential benefits that the anticipation of the flexibility of the tutelage to the flag could provide fuel consumers, the Government considered it important to create mechanisms for its applicability in the shortest possible time. For this, it is essential that there is regulation of the subject, especially to ensure adequate and clear information to consumers about the origin of the products sold. According to the new Provisional Measure, the rule that makes the protection of the flag more flexible may be provisionally regulated by Decree until the regulation of the ANP comes into effect.

Another important measure established by the Provisional Measure for the benefit of consumers concerns the option of bringing forward the direct sale of ethanol by producers or importers to retail resellers, dispensing with the intermediation of distributor agents. With this, the aim was to streamline the sector and reduce transaction costs, which will revert to benefits for consumers.

Seeking to streamline the entry into force of the direct sale of ethanol, the new Provisional Measure authorizes interested parties to opt for the immediate application of these rules, provided that they submit to the new tax regime provided for in MP nº 1.063. In this case, it will be up to the producer to individually assess whether he believes it is more advantageous to voluntarily anticipate the necessary fiscal measures and immediately submit to the new marketing regime, or if he prefers to wait for the period of the transitional rule provided for in the provisional measure original.

The government note emphasizes that the measure seeks to create adequate mechanisms to anticipate the effects of Provisional Measure No. 1,063, both in relation to the flexibility of the protection of the flag and the possibility of direct sale of ethanol to retail stations, which have the potential to provide benefits to fuel consumers.