After a year of successive increases, fuel prices, especially gasoline, may start to drop

According to data from the IBGE, in the last 12 months gasoline price inflation exceeded 50%, for ethanol it was around 70%, while diesel remained at a high of 49,56%. Thus, after being the most discussed subject during the year, the National Council of Treasury Policy (Confaz) froze the Tax on the Circulation of Goods and Services (ICMS) levied on the value of fuels. The measure was taken with the aim of reducing the impact of the price of gasoline on consumers' budgets, as it directly and indirectly influences the value of all products, since one of the parameters used to decide on the price to be charged is the value of the transport of goods.

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Consequences of frozen ICMS

Many thought that the value of ICMS is the main factor in the readjustment of the price of gasoline. However, it is necessary to consider the interaction with the world market, as the amount to be charged per barrel of oil varies according to the appreciation or devaluation of the dollar, being a more important factor for price fixing than the tax itself.

ICMS has been zeroed since November 1st and will remain that way until January 31st, 2022, as a palliative measure by the Federal Government, while the devaluation of the real is not overcome. The latter, in turn, is the main cause of high gasoline prices, which could be noticed with the very little price reduction after the ICMS freeze.

Gasoline at fixed price

Senators have developed a bill that aims to regulate gasoline prices at an average of R$5,00 as a way of trying to make things easier for consumers, but keeping the price in line with the global market.

PL 1.472, authored by Senator Rogério Carvalho (PT-SE), aims at pricing gasoline, diesel and also LPG (cooking gas), in addition to a tax on oil exports. The project has recently been approved by the Senate's Economic Affairs Committee and may significantly reduce the price of gasoline, since in many cities the value is almost R$ 8,00 per liter.

If the text is approved, it will be forwarded to the other competent bodies so that it can be analyzed, approved and enter into force. The PL has five main objectives:

• Establish new guidelines for the sale of fuels;
• Bring measures aimed at protecting consumers from internal and external price variations;
• Determine that the formation of fuel prices consider average quotations of international values;
• Determine the “band regime”;
• Create progressive crude oil export tax rates;
• Create a stabilization fund fed by this tax.

Cheapest gasoline in 2022

According to research by the company ValeCard, the prospect is that, in the first quarter of 2022, the price of gasoline will fall 5,94%, being sold at an average price of R$ 6,18 in March – this being the lowest index foreseen.

However, starting in April, the price of gasoline should rise again, reaching a peak in September. The oscillations are due to market instability and the devaluation of the real as it is an election year.