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Fuel prices in Brazil in the international comparison

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Fuel prices in Brazil in the international comparison

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Gasoline will have an average high of $ 0.0596 in its price in refineries and diesel, of $ 0.0916.

The increase comes after the barrel of oil prices soared on the international market due to attacks on Saudi Arabia, the world's largest exporter, over the weekend. The transfer to the consumer will depend on the distribution and the resale posts.

On Monday, President Jair Bolsonaro said Petrobras would not adjust prices. The state-owned company then announced to the market that it had decided "to monitor market changes in the coming days and not make an adjustment immediately".

However, two days later, the company announced the increase.

The last adjustment in the price of gasoline had been on the 5th of this month. Already diesel, on Friday (13). Since June, Petrobras' pricing policy has not been pre-defined for adjustments.

After all, how does Brazil position itself relative to other countries in terms of fuel prices?

The increase announced by Petrobras should not significantly affect Brazil's position in the international ranking of the countries that most charge for these products.

This is because, as this price comparison is made in dollars, the recent appreciation of the US currency against the real ends up amortizing this upward variation of both gasoline and diesel.

Thus, Brazil continues to occupy intermediate positions in the ranking of the Global Petrol Prices website, which uses Petrobras' prices as a reference.

Until September 16 – the latest available data – Brazil ranked 94th in the ranking of 164 countries with the most expensive gasoline in the world: US $ 1.05.

In the lead were Hong Kong, Monaco, and Barbados, in that order. The countries with the cheapest gasoline were Sudan, Cuba and Venezuela.

In relation to diesel, Brazil was the 106th of the 163 countries in the ranking. The most expensive diesel was found, respectively, in Hong Kong, Monaco and Iceland. The cheapest, in Cuba, Iran and Venezuela.

Remember, however, that the ranking is based on fuel values ​​in dollars – and does not take into account the purchasing power of the countries listed.

Thus, while Brazil occupies intermediate positions, the real weight of fuel in the Brazilian consumer's pocket is much higher than in many developed countries – where gasoline and diesel are more expensive, but the minimum wage also tends to be higher.

Fuel prices vary even within Brazil.

The average price of gasoline in September was $ 4.30 per liter, but ranged from $ 3.56 to $ 5.80 in different parts of the country.

Already the diesel was $ 3.54, ranging from $ 3 to $ 4.95.

The data are from the price survey system of the National Petroleum Agency (ANP), in a survey with more than 23,000 posts in the country.

In an interview with BBC News Brasil in May of this year, Fernanda Delgado, PhD in Energy Planning and research coordinator of the FGV Energia study center, explained that the difference between the regions is mainly due to the variation in the ICMS tax rate. Goods and Services), which is defined by State.

"Within the country you have differences because of ICMS taxation. Rio de Janeiro has the most expensive gasoline in Brazil because the ICMS on gasoline is over 30%. It's one of the highest ICMS percentages you have in the country and that makes a big difference compared to other states, "he said.

But could fuel prices be reduced?

Currently, Petrobras adopts a policy of readjustment of diesel and gasoline prices without defined periodicity.

But without a significant drop in the international price of oil, two scenarios could reduce the price of fuels in Brazil instantly.

One is the intervention in the price practiced by Petrobras – seen as an undesirable measure by those who defend the company's autonomy from the government, as it compromises the company's cash and is a bad sign for investors.

Between 2014 and 2017, Petrobras accumulated more than R $ 70 billion in losses, results that are attributed not only to the corruption deviations revealed by Operation Lava Jato, but also to the controlled prices policy.

Former President Dilma Rousseff's government has been criticized for freezing prices during periods of rising oil prices as a measure to try to control inflation.

Another scenario for short-term fuel price reductions would be tax cuts, which seems unlikely in Brazil, where both the federal government and most states have compromised accounts.

Currently, federal fuel taxes are as follows: 9% of the final price of diesel and 15% of the value of gasoline.

However, the largest share of tax is state: ICMS corresponds, on average, to 15% of the final price of diesel and 29% of gasoline, according to data from Petrobras.

This means that, on average, for every $ 10 spent on gasoline in Brazil, $ 4.40 is tax. In diesel, for every R $ 10 purchased, R $ 2.40 refers to taxes.

Greener Fuels

Ideally, according to experts heard by BBC News Brazil, would the government be able to use the revenue collected from the taxes levied on these fuels to stimulate investment in energy forms that generate less pollution.

This is the case, for example, of Norway, which ranks among the countries with the most expensive fuels, despite being the largest producer and exporter of oil and gas in western Europe.

The high price comes from high taxation to discourage fossil fuel consumption. The country is often accused of hypocrisy in its environmental policy: while being known as an example in protecting the environment, it is one of the world's leading oil and gas exporters.

Another scenario capable of reducing fuel prices would be to stimulate competition in the production chain. Petrobras has virtually a monopoly on the country's refining market, for example.

But in June, the state-owned company signed an agreement with the Administrative Council for Economic Defense (Cade) that provides for the sale of eight of its 13 refining units, which corresponds to about 50% of its capacity.

The agreement ended an investigation by the regulator about possible abuse of dominant position by Petrobras in the segment.

Cade had opened an inquiry to investigate whether Petrobras abused its dominant position in the sector, as Petrobras owns 98% of the country's refining market. The objective was to determine whether Petrobras was using its position to manipulate fuel prices and to prevent new competitors from entering.

Under the agreement, Petrobras has to sell the refineries by 2021.

The plan foresees, in addition to divestments in assets related to fuel transportation, at BR Distribuidora, the sale of eight refineries: Abreu e Lima (RNEST), Shale Industrialization Unit (SIX), Landulpho Alves (RLAM), Gabriel Passos ( REGAP), President Getúlio Vargas (REPAR), Alberto Pasqualini (RFAP), Isaac Sabbá (REMAN) and Northeast Oil Lubricants and Derivatives (LUBNOR).

In addition, the RLAM, RNEST, REPAR, REFAP and REGAP refineries may not be acquired by the same buyer or companies of the same economic group as they are considered as potential competitors.

"The schedule and compliance with the commitments assumed with Cade will be accompanied by an external agent, to be hired by Petrobras, according to specifications to be agreed upon," Petrobras said in a statement to the market at the time.

Regarding pricing, the state says that "as Brazilian law guarantees price freedom in the fuel and derivatives market, the revisions made by Petrobras may or may not be reflected in the final price, which incorporates taxes and onlendings from other agents in the sector. marketing: distributors, dealers and producers of biofuels, among others. "

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