The exemption from federal taxes on gasoline and ethanol ends this Tuesday (28), and the Planalto Palace has not yet decided whether to extend the measure. There is pressure from the political wing of the government of President Luiz Inácio Lula da Silva (PT) for the exemption to continue, but the Ministry of Finance resists the idea.
On the day of his inauguration, Lula signed a provisional measure determining that PIS/Cofins and Cide-Combustíveis would be zero for two months in operations involving gasoline and ethanol. The exemption of the two taxes had also been established during part of the mandate of former President Jair Bolsonaro (PL).
Lula’s economic team estimates that the return of tax collection could mean an addition of at least R$ 28 billion to public coffers. The Minister of Finance, Fernando Haddad, and other members of the portfolio consider the value significant and are in favor of the return of federal taxes.
However, the President of the Republic has been warned that the reinstatement could impact society’s assessment of his management. Thus, there are ministers who advocate that Lula either renew the exemption or start charging taxes gradually, so that the impact on consumers does not happen immediately.
Lula’s allies in the National Congress say that not extending the exemption is a wrong choice. According to the president of the PT, deputy Gleisi Hoffmann (PT-PR), “we are not against taxing fuel, but doing so now is penalizing the consumer, generating more inflation and failing to fulfill a campaign commitment”.
Last Friday (24th), Lula had a meeting with the president of Petrobras, Jean Paul Prates, to discuss the issue, but did not reach an agreement. This Monday (27), the Chief Executive should have new conversations with ministers to seek a solution.
According to calculations by the Brazilian Association of Fuel Importers (Abicom), if PIS/Cofins and Cide-Combustíveis are again charged in full, the price of a liter of gasoline should rise by R$ 0.68 at gas stations and that of ethanol, by R$ $0.24.
At the moment, according to the association, the average price of gasoline in the Brazilian market is above that practiced abroad, despite the fact that Petrobras has adopted the PPI (international parity policy) to define the price for selling fuel in Brazil.
Until last Friday, fuel prices at the state-owned refineries were 6% more expensive compared to the international market, which means a difference of R$ 0.20 per liter, according to Abicom’s calculations.