Amid rising fuel prices, Bolsonaro says he has ‘willingness to privatize’ Petrobras | Policy

Amid rising fuel prices, President Jair Bolsonaro said this Thursday (14) that he has “the will to privatize Petrobras.” He did not give details on how the state-owned sale process would be and said that he will discuss the matter with the economic team.

Bolsonaro gave the statement in an interview on Novas de Paz radio, in Pernambuco.

The president repeated the arguments of recent months. He claims he is not to blame for the rise in fuel prices. In addition, the president shows irritation when he is charged for skyrocketing prices.

On Wednesday night (13), with the aim of inducing price reductions, the Chamber approved a bill with a change in the rules on the incidence of the Tax on Circulation of Goods and Services (ICMS) on fuels (video below).

Chamber approves bill amending ICMS calculation on fuels

Chamber approves bill amending ICMS calculation on fuels

The final price of fuel is composed of the price charged by Petrobras at the refineries (linked to the international market, according to the government), plus federal (PIS/Pasep, Cofins and Cide) and state (ICMS) taxes, in addition to the cost of distribution and resale .

In gasoline, there is also the cost of anhydrous ethanol. In diesel, there is the incidence of biodiesel. The variations of all these items is what determines how much fuel will cost at the pumps.

But the devaluation of the real against the dollar makes oil products more expensive for the Brazilian consumer, as the product is traded worldwide in the US currency.

For Bolsonaro, his action as president on all these factors is limited.

“It’s very easy. Has gasoline increased? Bolsonaro’s fault. I’m willing… I’m already willing to privatize Petrobras. I’m willing, I’ll see with the economic team what we can do. What happens? I can’t … It’s not controlling. I can’t better direct the price of fuel, but when it increases, it’s my fault. It increases cooking gas, and it’s my fault, despite having zeroed the federal tax, which I don’t happens by many governors,” said the president.

In the 2018 election campaign, Bolsonaro said he “wouldn’t like” to see Petrobras privatized. At the time, he declared that the measure would only be taken “if there is no solution”.

Economy Minister Paulo Guedes, on the other hand, defended last month that Petrobras should join the “queue” of privatizations in the coming years.

Gerson Camarotti 'Bolsonaro 'transfers responsibility' to the states and does not charge Petrobras'

Gerson Camarotti ‘Bolsonaro ‘transfers responsibility’ to the states and does not charge Petrobras’

High fuel prices

According to data from the Extended National Consumer Price Index (IPCA) released by the IBGE, in the last 12 months up to September, gasoline rose 39.6% in the country and bottled gas advanced 34.67%.

A survey by the National Agency for Petroleum, Natural Gas and Biofuels (ANP) showed that the average price of regular gasoline at the pumps reached R$ 6.092 per liter in the last week of September — the 8th consecutive weekly high.

In the case of fuels, the explanation for the increase in prices lies in several factors, but mainly in the value of oil and the exchange rate. The rise in the price of a barrel and the devaluation of the real against the dollar make it difficult to reduce values.

The dollar and the price of oil have had more influence on prices in Brazil since 2016, when Petrobras started to practice the International Parity Price (PPI), which is guided by fluctuations in the international market.

Bolsonaro also praised the approval, in the Chamber, of a bill that changes the ICMS calculation to try to reduce fuel prices. The text still needs Senate approval.

The proposal determines that the ICMS charged in each state will be calculated based on the average price of fuel in the two previous years.

Chamber approves proposal amending ICMS charge on fuels

Chamber approves proposal amending ICMS charge on fuels

Currently, the ICMS applied to fuels is based on the average price of gasoline, diesel and ethanol in the previous 15 days in each state. In other words, every 15 days, the calculation basis changes – and starts to include the recent price fluctuation.

Bolsonaro said that this is not the “ideal project”, but that Lira approved “what was possible”. The deputy estimates that the reduction in prices could reach 7% this year.

Bolsonaro has been trying for months to hold the governors responsible for the high prices of fuel and cooking gas, due to the collection of ICMS, a state tax on these products.

Fuel price composition — Photo: Economy G1

VIDEOS: policy news