Chamber President says deputies have done their part by approving changes in the ICMS levy
The Speaker of the Chamber, Deputy Arthur Lira (PP-AL), charged the Petrobras this Thursday, the 14th, to contain the soaring price of fuels and cooking gas. In a post on Twitter, the congressman cited the approval of changes in the ICMS charge, a state tax, by deputies. “The Chamber took the 1st step to contain the rise in fuel prices. We changed the incidence of ICMS. We did our part and gave an answer to Brazil. Now, we wait for Petrobras. May gas and fuels be lighter in the tight pockets of Brazilians,” wrote Lira. The new directive approved by lawmakers on the night of Wednesday, 13, determines that the value of the ICMS be applied to the average price of fuel in the last two years, in what is seen as a way of making gasoline, for example, cheaper, which costs more than R$7 per liter in some states. The proposal was approved by 392 votes to 71, and all the proposed highlights were barred. The text went to debate in the Senate.
Currently, ICMS is calculated based on a reference price, the PMPF (weighted average price to the final consumer), which is reviewed every 15 days based on a survey carried out at the stations. Although governors did not increase rates during the pandemic, international appreciation has driven the price of Gasoline It’s from diesel went up. With the new project, it is expected that an average of the last two years will be considered, that is, that it will become a fixed base, from which all States would apply their rates, defined from those they had on December 31 from the previous year. The rates will be defined annually and will remain in effect for 12 months. According to Lira and the project’s rapporteur, Dr. Jaziel (PL-CE), the price of gasoline should drop 8%, diesel 3.7% and ethanol 7%, although they have not explained how they made the calculation. The Brazilian Federation of Associations of State Tax Inspectors (Febrafite) calculates that Lira’s proposal would generate a loss of R$ 24 billion per year in the collection of states and municipalities. Governors and mayors demonstrated against the bill and tried to block the text in the Chamber, without success. State representatives support the proposal presented by Minister Paulo Guedes on the subject, with a focus on selling shares of state-owned companies to feed a fund to stabilize fuel prices.
The Chamber took the 1st step to contain the rise in fuel prices. We changed the incidence of ICMS. We did our part and gave an answer to Brazil. Now, we wait for Petrobras. That gas and fuels become lighter in the tight pockets of Brazilians.
— Arthur Lira (@ArthurLira_) October 14, 2021
THE Petrobras announced, on Friday, the 8th, the 7.2% increase in the price of the Gasoline It’s from cooking gas. The average price of Liquefied Petroleum Gas (LPG) rose from R$ 3.60 to R$ 3.86 per kilo. Thus, the 13 kilos needed to fill a cylinder cost R$50.15 at refineries. In the case of fuel, there was an adjustment of R$ 0.20 per liter, from R$ 2.78 to R$ 2.98. In a statement, the state-owned company highlighted that this was the first increase in gasoline in 58 days and stated that the change is important “to ensure that the market continues to be supplied on an economic basis and without the risk of shortages by the different actors responsible for serving the various regions Brazilian companies”. Also according to Petrobras, the readjustments “reflect part of the rise in international oil price levels, impacted by the limited supply in view of the growth in world demand, and the exchange rate, given the strengthening of the dollar globally.” Last week, the state-owned company had increased the price of diesel oil by 8.9%, in the first readjustment in 85 days.
The increase in fuels has become a sensitive issue for the government, given its strong impact on increasing the inflation. Constantly, the group leads the variation of the Broad Consumer Price Index (IPCA), directly impacted by the rise in the barrel of oil and the devaluation of the exchange. In the 12 months ended in September, fuels registered an increase of 42%. Gasoline had a variation of 39.6%, while diesel increased 33%. According to André Braz, economist at the Brazilian Institute of Economics, of the Getulio Vargas Foundation (Ibre/FGV), the permanence of these two forces at high levels should give more impetus to the advance of inflation in the coming months. “Rising oil reflects the warming of the world after the passage of Covid-19, and this contaminates prices a lot. This adds up to our currency, which is greatly undervalued”, he says.