BRASILIA and RIO — The federal government published this Tuesday a decree authorizing service stations to sell fuel, including gasoline, of any brand. They will also be able to buy ethanol directly from producers and importers.
To put these actions into practice, the government anticipated a provisional measure last month, which granted a period of 90 days for the National Petroleum Agency (ANP) to define rules.
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Sector entities fear that the measures will contribute to increasing tax evasion.
Currently, gas stations linked to distributors can only sell products of that brand. In the government’s assessment, by allowing them to buy from any supplier, the decree should increase competition and exert pressure to lower prices at a time of escalating inflation.
Last month, gasoline represented the biggest contribution to the IPCA, the official inflation index, with a high of 2.8%.
In the assessment of specialists, however, the initiative was rushed and should not have the expected effect, in addition to contributing to uncertainty in the sector, by leaving the regulatory agency aside in a debate on sectorial rules.
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Distributors remain solely responsible for mixing ethanol with gasoline and biodiesel with diesel oil. Sector entities and specialists fear that the measures will result in increased tax complexity and greater tax evasion, without greater benefits for the consumer.
There is also a risk of legalizing the issue due to contracts signed between service stations and distributors.
According to the decree published yesterday in the Official Gazette of the Union, the gas stations must expose the origin of the product at the fuel pumps.
Valéria Amoroso Lima, executive director of Downstream at the Brazilian Petroleum Institute (IBP), says the measures will help disorganize the sector:
— It is necessary to understand why the government is in such a hurry to allow gas stations to sell fuels of different brands, since the ANP itself is already analyzing the issue and as soon as it has regulations, it will bring new rules for the sector.
In addition to the risk of legalization, Valéria points out that the practice of selling fuels of different brands without the obligation of different tanks, for example, can bring the risk of fraud and false advertising.
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She cites a study by the Getulio Vargas Foundation (FGV) which points out that the country already suffers from a total of US$ 24 billion in tax and operational fraud in the sector.
The director of a company in the sector highlighted that the government’s measure represents a loss for the consumer, as many stations may mix the fuels, reducing consumer rights.
This executive highlighted that this will generate judicialization until the ANP defines new rules, which tends to be a lengthy process.
Valéria, from the IBP, also criticized another government measure that already foresees the possibility of selling ethanol directly between producers and service stations without the need for an adaptation period.
States need time
According to her, the states need time to define ICMS collection rules between producers and stations and how this will be done:
– The sector is in a fight between government and states. Without defining the ICMS collection rule, more evasion can occur, since it is another open door.
According to the executive of a distributor, the ICMS is collected in part by the distributors and in part by the producer. With the new government measure, producers may not pay ICMS, as each state will have to create legislation, which does not yet exist.
In practice, this tends to lead to a loss of revenue for the states and unfair competition among distributors. Therefore, the bet is that there will also be judicialization.
‘Are you going to break a contract?’
For Paulo Miranda, president of the National Federation of Commerce of Fuels and Lubricants (Fecombustíveis), the measures are a storm with no practical effect, that is, without solving the price or promoting competition.
— A service station has a contract with the distributor that provides for exclusivity. So which post will break a contract? Therefore, the measure in practice will not bring changes – he said, noting that half of the Brazilian market for service stations is already under the white flag.
For Miranda, one of the main reasons for the high price of fuels is the advance of the dollar, caused, above all, by political instability. He cited the need to change the ICMS charge, which is statewide.
In the year, the price of gasoline at the refinery accumulates an increase of 51%. In posts, the increase exceeds 30%, according to the official inflation index. According to the ANP, in three states the product is found above R$7 per liter: Rio de Janeiro (R$7.059), Rio Grande do Sul (R$7.185) and Acre (R$7.130).
Sergio Araujo, president of the Brazilian Association of Fuel Importers (Abicom), cites the logistical complexity to allow gas stations to buy ethanol directly from mills and importers.
— An importer buys and sells large volumes. Therefore, starting to sell small volumes is complex and will not generate cost reduction, as the gain is precisely in volume. The same happens with the plants, as the station needs to have a specific truck for this transport. It is a complex logistics – highlighted.
According to Sandro Maskio, coordinator of studies at the Economic Observatory of the Methodist University of São Paulo (Umesp), in general the measure should not change the prices on pumps:
— The distributors already have the logistics and work scale. Allowing broad competition from direct sales causes distribution reorganization.
When contacted, the ANP said it does not comment on government decisions. A sector source recalled that the government has been trying to centralize sector decisions. In favor of direct sales to service stations, Unica, which represents ethanol producers, said it awaits the tax definitions that the Internal Revenue Service must present.