While Brazilians do their best to supply, Petrobras sees revenue far outweighing its costs. In the first quarter of this year, the company earned R$ 44.6 billion, equivalent to R$ 495 million per day. But only about 30% of these dividends are passed on to the Federal Government, the company’s largest shareholder. Most end up in the hands of foreign investors, oblivious to the impact caused by the constant highs at gas stations in Brazil.
For Rodrigo Leão, a researcher at the Institute for Strategic Studies of Petroleum, Natural Gas and Biofuels (Ineep), even if the profit related to the Union returned as a subsidy to try to lower the price of fuel to the final consumer, the effect would be small.
“The value referring to Petrobras is approximately one third of the composition of the final price of the fuel. So, if you divide the Federal Government’s dividends among the entire volume produced by the company, it will end up having a very small impact”, explains the specialist. Petrobras produced, in the first quarter alone, 684 thousand barrels per day of diesel and 374 thousand of gasoline.
According to the expert, for the country to define an adequate public policy for the price of oil, it is necessary that all the actors involved can talk to see how much each one can give, including investors. “I don’t think it’s fair that only consumers use their profits to subsidize fuel. Shareholders also need to have their share of sacrifice. We need to socialize this process, involve all actors, including distributors, gas stations and states,” he argues. In 2021, Petrobras had a historic profit of BRL 106.6 billion.
Leão also recalls that Petrobras pays high taxes (about R$ 70 billion in the first quarter of this year) and is one of the largest employers in Brazil, but has stopped investing in social, cultural and environmental projects in recent years.
Too many components for the price
The pricing of gasoline and diesel oil, for example, is impacted by the collection of the Tax on the Circulation of Goods and Services (ICMS), which is calculated in different percentages by each State, and the Contribution for Intervention in the Economic Domain (CIDE), Pis and Cofins – under the responsibility of the Union.
Currently, a bill is being discussed in Congress with proposals to cushion the constant increases in fuel prices. Among them is the creation of a Fuel Price Stabilization Account (CEP-Combustíveis), a fund supplied with revenues from the oil and gas sector.
Also a researcher at Ineep, Carla Ferreira defends the creation of a fund to subsidize the final price of fuel and reduce the impact on the final consumer. “It would be a stabilization fund that could be fed with a tax on crude oil exports (from the pre-salt layer, for example). It could dampen international price swings. In addition, the establishment of a variable rate tax. If the price is high, you reduce the rate internally”, says Ferreira.
Change in ICMS would be an option
The arm wrestling between federal and state governments is more complex. The collection of ICMS weighs heavily on the composition of fuel prices (for gasoline, the average is 27%), but it is also the main source of collection for most states. To avoid an even greater escalation in the prices charged at the pumps, the reference value of the tax (adjusted according to the update of the values passed on to the consumer) is frozen by the States until the end of June.
In the opinion of UFMG Tax Law professor Paulo Coimbra, an alternative to lower fuel prices in Brazil would be a Complementary Law that would limit the states’ ICMS rate. The text would have to be edited by the Federal Government and approved by the National Congress.
As it is an essential service, Coimbra suggests a percentage of ICMS below 18%. In Minas, for example, the rate on gasoline reaches 30%. “A period of gradual transition can even be foreseen until the collection is compensated by the increase in consumption or with some compensation coming from the Union”, exemplifies Paulo Coimbra.
The professor also suggests the extinction of Cide. The contribution was created in 2001 to be calculated on import and sale activities of oil and its derivatives, natural gas and its derivatives, and fuel ethyl alcohol.
“Cide did not exist when the Federal Constitution of 1988 was edited and a measure that could contribute is the extinction of the tax. The Union has a surplus and is the federative entity that collects the most”, she says.
In a note, Petrobras stated that it “reiterates its commitment to the practice of competitive prices and in balance with the market, following up and down variations, while avoiding the immediate pass-through to domestic prices of volatility , that is, it avoids the transfer of temporary variations that can be reversed in the short term. As an example, we can cite circumstantial variations in the price of oil and the exchange rate”.