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IBP Sends Letter To President Lula Requesting Veto To Changes In The Reference Price Of Oil Outlined In MP 1.304. Sector Fears Increased Costs, Legal Uncertainty, And Retraction Of Investments.
The oil sector has returned to the center of political discussions after the Brazilian Institute of Oil, Natural Gas and Biofuels (IBP) sent, on Monday night (17), a letter to President Luiz Inácio Lula da Silva. The document requests that the Executive veto parts of the MP 1.304, which modifies the methodology for calculating the PRP (Reference Price of Oil). The measure, approved by Congress, is about to be enacted and has generated strong reactions among companies and entities in the sector.
Changes In The PRP Are Seen As A Threat To The Business Environment
The PRP is the index that defines the base for charging royalties on oil in Brazil. Therefore, any alteration that causes an increase in this reference price can result in a significant rise in costs for oil companies.
The IBP states that the proposal embedded in the MP brings “risk of reduced investments, decreased future revenue, and violation of current contractual rules,” reinforcing the potential negative impact in the long term.
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In the text sent to the government, the institute argues that the changes recently approved by the ANP (National Agency of Oil, Natural Gas and Biofuels) should be maintained. The entity classifies the intervention of parliamentarians in the index as “hasty and inappropriate,” even suggesting that the provision represents a “jabotí,” as it addresses a topic “absolutely foreign to the scope of the electric sector,” which predominates in the provisional measure.
IBP Points Out Legal Uncertainty And Warns Of Impact On Contracts
The letter received by President Lula emphasizes that changing the rules during the validity of contracts undermines the predictability of a capital-intensive sector with long-term operations.
IBP’s Director of Exploration and Production, Cláudio Nunes, reinforces the alert by stating:
“The oil and gas sector is capital-intensive and operates under long-term contracts. Attempting to change the rules of an ongoing game is unconstitutional and creates legal uncertainty that will deter investments and may result in decreased future revenue for federal entities.”
The statement makes it clear that the concern involves everything from regulatory uncertainty to potential litigation, including increases in operational costs and uncertainty regarding the future viability of strategic projects.
Calculation Proposed By Congress Is Identified As Detrimental By The Sector
The MP stipulates that the new PRP be calculated based on three criteria, observed sequentially:
- Average Quotations Published By International Agencies.
- Transfer Price Used In IRPJ.
- Reference Price Calculated By The ANP Methodology.
The IBP contests the prevalence of the first two criteria and states that both are inadequate to reflect the value of production at the ANP’s fiscal measurement point — the legal basis that determines the calculation of royalties.
According to the institute, the quotations from international agencies refer to a few oil types that lack sufficient liquidity to represent the diversity of Brazilian production. Additionally, the Transfer Price, intended for the calculation of Income Tax, does not align with the nature or periodicity of royalties.
Thus, the methodology, besides being complex, could generate legal uncertainty, excessive litigation, and regulatory inefficiencies.
Another highlighted point is that the expectation of increased revenue “lacks support in reality,” considering that, under legislation, the values must be normalized to converge with the prices currently calculated by the ANP.
Private Refineries Advocate Another Reading Of The Impact Of The PRP
Despite the strong resistance from the IBP, MP 1.304 received support from lawmakers aligned with the thesis of private refineries. Represented by the Refina Brasil association, these companies argue that the increase in the PRP can reduce fiscal distortions used by large oil companies and, consequently, strengthen the domestic market.
A memorandum requested by the entity from the Suassuna de Vasconcelos office states that the reference price currently practiced “does not correspond to the market price of oil,” as required by the Oil Law (Law 9.478/1997).
The lawyers argue that, even with the revision made by the ANP, the PRP remains “significantly distant” from the actual quotations, with an average lag of approximately 4%. This disconnection, according to the document, could generate losses “between R$ 83 billion and R$ 111 billion over 10 years” for the Union, states, and municipalities.
Government Begins Movement To Revise Position And Evaluates Partial Veto
The topic gained traction within the federal government. Although the Ministry of Finance initially showed support for the text approved by Congress, the department backed down after contrary pressures from the MME (Ministry of Mines and Energy) and the Civil House.
The ANP itself has positioned itself against the changes in the PRP methodology and against the limitation of gas reinjection by the CNPE (National Energy Policy Council). In a letter sent to the MME, the agency justified:
“The current model [of the PRP], regulated by the ANP, already ensures technical, transparent, and auditable criteria, based on the physical-chemical characteristics of hydrocarbons and market prices. The proposed new wording, by replacing this system with averages of international quotations and transfer price methodology, is technically unfeasible (…).”
The note also emphasizes that the change disregards the diversity of national oils, depends on restricted data from a few private agencies, breaks the coherence of the government participations model, and increases the risk of litigation.
Petrobras Expresses Concern And Signals Possible Cancellation Of Projects
Alongside the technical debate, Petrobras has adopted a firm stance. Executives from the state-owned company have been warning that the change in the PRP may compromise its investment capacity precisely at a time when international oil prices are pressured.
The company is already talking, in fact, about the possibility of canceling important initiatives, such as the revitalization of the Campos Basin.
The state-owned company’s position resonates within the government, especially with President Lula, who sees Petrobras as a driver of economic development and job creation. The growing pressure increases the likelihood of a presidential veto — total or partial — to the most controversial aspects of MP 1.304.
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