Government studies ways to avoid new energy readjustments – 05/09/2022 – Market

To try to hold the price of energy in an election year, the government intends to change the plans for the use of resources from the privatization of Eletrobras to limit the electricity bill as much as possible before Brazilians go to the polls.

The idea under discussion includes changing the state-owned company’s sales model, which is under evaluation by the TCU (Union Court of Auditors).

The version that will be judged by the ministers of the control body on the 18th provides for the payment by Eletrobras of a grant of R$ 25 billion in cash to the National Treasury and of R$ 32 billion in annual installments over five years to be deposited. in the CDE (Energy Development Account), used to lower prices through subsidies from the National Treasury.

The plan, still under study, is to reverse the original, so that the CDE receives the funds in cash and the Treasury, in installments. In this way, it would be possible to limit tariffs through subsidies.​

The problem, according to TCU technicians, is that the court had already discussed the anticipation of the resources to the CDE and blocked the value of this rebate at R$ 5 billion. A different proposal would have to be resubmitted to the ministers, which could further delay the process with a possible request for a view.

Executive members recognize that the plan is being designed to avoid the electoral impact of the readjustments.

They also recognize that the mechanism should affect public accounts, but argue that it is possible to be less rigorous with fiscal data to avoid increases.

Suspension of tariff increases by Aneel is discussed in Congress

The political class has come up with different ideas so that energy readjustments do not get off the ground this year – which can have different effects, such as an accumulation of readjustments for next year or the use of public resources to plug the hole in companies. .

The Chamber approved the urgency of a draft legislative decree to suspend increases in energy tariffs approved by Aneel (National Electric Energy Agency), many of them close to 20%.

The idea is to postpone the impact to 2023, avoiding repercussions on consumers’ pockets in an election year. The proposal was presented by deputy Domingos Neto (PSD-CE) under the argument of preventing the electricity bill from being “the great villain of inflation”.

After a 10.06% rise in prices last year — the biggest since 2015, under Dilma Rousseff (PT) — inflation forecast by economists is at 7.89% for 2022, the year in which Bolsonaro seeks reelection. Deputies and a third of the Federal Senate will also try for new terms.

Economic team rules out subsidizing fuels

Another concern of the political class in an election year is the price of fuel. This Monday, Petrobras announced a new adjustment in diesel. With the increase of 8.87%, the accumulated increase in fuel in refineries is now 47%.

Diesel is the basic input for truck drivers, an important base of political support for Bolsonaro and which has already pressured the government for a package of kindnesses.

Representatives of the category even threatened Bolsonaro with rupture for not having delivered a relevant reduction in the price of diesel, as the president promised months ago.

Despite pressure for new ideas to limit product prices, the economic team remains opposed to the idea of ​​using public resources to try to contain values.

Members of the Ministry of Economy, consulted anonymously on the matter, say that previous experiences with fuel subsidies have not had the desired effect. That is, the measures used taxpayers’ money and failed to bring prices down.

About two months ago, Guedes had admitted that subsidies from the National Treasury could be adopted for diesel if the Ukrainian War was prolonged.

“If that [guerra] resolved in 30 or 60 days, the crisis would be more or less addressed. Now, is this going to rush and turn into an escalation? Then you start thinking about subsidy for diesel”, he said, in March.

At the time, the expectation was that the first shock of the diesel war would be softened by the tax changes that were being passed in Congress.

Amendments approved by law changed the collection of ICMS (Tax on Circulation of Goods and Services) and cut PIS/Cofins for diesel.

The government’s expectation was that the changes promoted by the text (in ICMS and PIS/Cofins) would reduce by two thirds (that is, R$ 0.60) the diesel readjustment at the time.

Now, however, the economic team says that the changes had no effect, especially due to the governors’ willingness to continue charging a higher ICMS.

On Thursday (5), the Ministry of Economy stated that the decision of the states to keep the ICMS high “neutralized and emptied the objectives of the law, not contributing to the efforts to establish a balanced and fair taxation”.

According to the ministry, Guedes even warned the states about the possible frustration of society for not meeting the objectives of the law. According to the note, the minister “is still available for discussion and evaluation of proposals that improve fuel taxation in the country.”