Amid successive increases in gasoline and cooking gas prices, the federal government hit the key to promoting changes in the Goods and Services Circulation Tax (ICMS). For the Minister of Oil, Gas and Biofuels at the Ministry of Mines and Energy (MME), José Mauro Coelho, state taxation generates a “multiplier effect” on the final price of fuel, and therefore, he advocates for a tax monopoly.
“ICMS is a percentage of the final price of the fuel. So, this also has the potential to increase the price even more. It is like a multiplier effect. The fuel increases, I apply a percentage to this fuel, and with that increase the secretary explained in an interview with Brazil in Pauta, TV Brazil, broadcast on Sunday (3), that the value of ICMS in riyals per liter, is also increasing.”
In Coelho’s assessment, the government’s proposal to make ICMS unique and stable would ensure greater stability in petroleum product prices. “Today, ICMS is charged at all stages of the fuel marketing chain. The idea of the first stage of the tax is that this tax is charged at one stage of the chain, which simplifies operations,” the secretary argued.
Standardization of ICMS rates across the country is part of the intended actions through Supplementary Bill (PLP) 16/21, of the Executive Branch. The proposal, which was sent to Congress in February, has been unable to reach a plenary vote, an expression that the chamber’s president, Arthur Lyra (PP-AL), has ramped up in recent weeks. This was one of the main elements Talks between the President of the Chamber, President Jair Bolsonaro and Minister Paulo Guedes in discussions of economic negotiations.
The change is controversial and concerns states that fear losing revenue. Bolsonaro was pushing for the approval of the PLPAppeal to the Federal Supreme Court (STF) to force the change. The International Center for Fuel Management attributed the rise in fuel prices. refute the rulers, arguing that they did not make new adjustments in the ratio, but gasoline has already increased 40% this year.
For Coelho, the government project is an “important and organized initiative, with the potential to reduce the price of fuel for the Brazilian consumer.” However, the minister considered that the rise in the prices of petroleum products had other reasons. He referred to the dollar’s exchange rate and the rise in the price of a barrel of oil on the international market, which “at the beginning of the year was $50 and today is about $78 a barrel.”
Depending on imports, Brazil suffers from increases abroad. “We should have prices in the domestic market related to the import breakeven,” Coelho said, acknowledging that “although the federal government has been making great efforts since 2019 to attract investments in refining units, Brazil is still an importer of derivatives.”
Since the beginning of 2021, the price of gasoline has increased, on average, by 35% of the amount that has passed to the consumer. Other oil variables also followed the upside. In the case of cooking gas, the increase is about 30% with Cylinders cost R$130 in some areas of the country. Meanwhile, the increase in diesel is about 28%.
“Music fanatic. Very humble explorer. Analyst. Travel fanatic. Extreme television teacher. Gamer.”