December 9, 2023

Ask questions about fuel taxes

This March, millions of Brazilians are feeling the brunt of the increase in fuel costs. By decision of the federal government, the average price of gasoline and ethanol has become significantly more expensive, which directly affects who uses private transportation and who does not use it as well, in some way.

In the first half of March, the average price of a liter of petrol increased in all regions of the country, According to a study by the Ticket Register Price Index (IPTL). That is, the average fuel price was R$5.88, 9.04% increasecompared to the same period in February this year.

Moreover, when analyzing the situation by region, it is possible to notice this Southeastthe most populous region in Brazil, 8.49% per liter of gasoline. This is the lowest level of increase. The highest increase was recorded in the North region.And Where the fuel was sold at a price of 6.23 Brazilian realsWhich indicates an increase of 9.85%.

But after all, why does the increase happen? What is the fuel load? Is there really a gas surcharge that you have to pay? Below we break down a series of questions and answers on this topic, so that citizens can stay on top of it and draw their own conclusions about Planalto’s decision.

1. What is fuel recharge?

Fuel recontainment consists of current resolution Federal government To re-introduce federal taxes to gasoline and ethanol prices. Last year, former President Jair Bolsonaro (PL) decided to cut fuel costs, causing average prices to drop. With the resurgence, prices are naturally rising again now.

2. Why did the government decide to re-exist?

But why did the federal government decide to increase fuel prices at the risk of unpopularity? According to experts, if the executive branch does not collect these taxes again, it could lose nearly R$30 billion by the end of this year. Without this amount, the union’s coffers could collapse, according to the Finance Ministry.

3. What happens if the exemption continues?

Without the R$30 billion that should come from collecting these taxes, the federal government will have to draw that amount from its own budget. However, there is no longer room for this withdrawal given that the public spending cap is still in effect.

On the other hand, if the relief continues for a longer period, inflation is likely to decline over the next few months. After all, the average price of gasoline and ethanol will be cheaper.

Gasoline is more expensive at gas stations across the country. Photo: Agência Brasil/EBC

4. Why is diesel still exempt?

Contrary to what happened to gasoline and ethanol, the Ministry of Finance chose to maintain the exemption in the price of diesel. There are several reasons for this choice.

The first is that diesel has a greater impact on the Brazilian economy. This is the fuel commonly used by truck drivers, who transport thousands of goods every day across the country.

If the value increases, the price of all of these products is likely to rise as well, which can cause inflation to grow again.

In addition, there are also fears that truck drivers will start a strike against President Luiz Inácio Lula da Silva (Workers’ Party), which could be rather bad for the economy.

6. Can the government apply new increases?

Yes. The current phase of the return states that the taxes will only be in effect until the end of June. If the National Congress approves this temporary measure (MP), the government can continue to apply the same measure for a longer period of time.

Another option is to not approve the text in Congress, and to introduce a second deputy in the second half with a new re-enactment.