States decide to end ICMS freeze on fuels – Rádio Itatiaia

Photo: Marcelo Camargo/Agência Brasil
Marcelo Camargo/Agência Brasil

Before the freeze, ICMS was levied on the weighted average price to the final consumer

The National Committee of Secretaries of Finance (Comsefaz) announced this Friday, 14, that it will end the freezing of the Tax on the Circulation of Goods and Services (ICMS) on fuel on the originally scheduled date of January 31. Thus, from February 1st, this value may change again. Minas Gerais voted against the measure because it wanted to keep the freeze.

The governor of Piauí and coordinator of the National Forum of Governors, Wellington Dias, released a note with the following statement: “We did our part by freezing the reference price for ICMS, but they did not value this concrete gesture, they did not respect the people. answer was increase, increase plus increase in fuel prices.”

He also considered that the increases in gasoline and diesel have only served to “increase Petrobras’ profits” and called for a definitive solution for fuels through tax reform. “Most states voted to maintain the freeze rule only until the end of January, considering the federal government’s closure to dialogue and successive increases in fuel prices, without concern for the economic and social impact,” he added.

Some of the secretaries considered that the measure was enough to show that President Jair Bolsonaro was wrong to blame the States for the rise in gasoline and diesel prices. Another part considered that it would not be ideal to reactivate the tax calculation in the middle of an election year.

Before the freeze, ICMS was levied on the weighted average price to the final consumer, which is readjusted every 15 days.

Each State has the power to set the rate. According to data from the National Federation of Fuel Trade (Fecombustíveis), it varies between 25% and 34% for gasoline, depending on the state. Even with ICMS stagnant since November 1st, fuel prices continued to rise at gas stations.

The final price of fuel is composed of the amount charged by Petrobras at the refineries (linked to the price of a barrel of oil on the international market and to the exchange rate), plus federal (PIS/Pasep, Cofins and Cide) and state (ICMS) taxes, in addition to distribution and resale margins and the cost of biodiesel, in the case of diesel oil, and of ethanol, in gasoline.

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