President Jair Bolsonaro decided to bring forward the coming into force of two measures announced in August to try to increase competition in the fuel market, the direct sale of ethanol between plants and service stations and the possibility that service stations sell fuel from other brands.
The changes were the subject of an MP (provisional measure) signed on August 11, running over the debate on the themes in the ANP (National Agency for Petroleum, Gas and Biofuels). The text, however, provided for a period of 90 days to come into effect.
In a statement, Palácio do Planalto says that new MP and decree signed on Monday regulate the new model and already allow its immediate application, in yet another hurdle to the work of the ANP, which would have a period of 90 days to define the rules.
“Given the potential benefits that the anticipation of the flexibility of tutelage to the flag may provide fuel consumers, the government understood that it was important to create mechanisms for its applicability in the shortest possible time”, says the text.
The promise of gains from the changes is questioned by the fuel market and potential losses to the consumer were the subject of a challenge by the Procons in a public consultation by the ANP to debate the changes.
Distributors and the defense of competition are specifically concerned with the possibility of selling fuel from other brands at service stations. For consumer protection agencies, the measure violates legal provisions that guarantee the right to clear, precise and adequate information.
In this Monday’s press releases, the government says that this problem is resolved by regulation, which requires service stations to inform the name of suppliers “in a prominent and easy-to-view manner” to “ensure that the consumer is properly informed about the origin of the fuel. “.
In the case of direct ethanol sales, the market’s biggest concern is the possibility of tax fraud, since mills that decide to opt for the new model will also have to collect taxes currently collected by distributors.
To reduce this risk, the government transferred the portion of federal taxes from the distributor to the plants in case of direct sales, but the issue still needs to be detailed by the states in relation to ICMS. The decree of this Monday says that it will be up to the producer to assess whether he intends to anticipate the fiscal measures or whether he prefers to wait for the period of the transitional rule.
The government defends that, with the anticipation, “it was sought to dynamize the sector and reduce transaction costs, which will revert in benefits to consumers”.
For industry experts, however, benefits will only be felt in locations close to ethanol-producing plants, as large-scale transport and storage should continue to depend on the infrastructure of fuel distributors.
The main defenders of direct sales are the sugar mills in the Northeast, which have production close to the region’s large consumer markets. Without going through the distributors, they defend that they would be able to deliver the products at better prices.
Fuel prices have never been so expensive in Brazil. Gasoline, diesel and gas cylinders have been breaking successive records, even considering the correction of old values for inflation, since the end of the second quarter.
Escalating pump prices have had a negative impact on Bolsonaro’s popularity. On the eve of the September 7 demonstrations in support of the president, opponents spread posters referring to the price of gasoline having already exceeded R$7 per liter.