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Revocation of the Differential Pricing Policy Ends Government Subsidy and the Price Difference of Kitchen Gas (LPG) Sold in 13 kg Cylinders and in Bulk
The CNPE (National Energy Policy Council) revoked the rule that allowed the practice of differential pricing for liquefied petroleum gas, the popular kitchen gas. Thus, there will no longer be a government subsidy that allowed residential consumers to pay less for LPG.
The measure was published today (08/29) by the Ministry of Mines and Energy (MME), and the initiative aligns with the policy of opening the New Gas Market of the new government.
What happens today in the market is that kitchen gas (LPG) is sold at differentiated prices between that packed in 13 kg cylinders and that sold in bulk. Now residential consumers will pay the same price as industrial consumers.
The government’s intention is that with the revocation of the measure there will be an incentive for other companies to enter production and import.
In a statement, the MME reported: “The change contributes to the increase in the supply of LPG and the development of the market.”
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When the Change Will Occur
The CNPE’s determination will take effect on March 1, 2020. The timeframe, according to the MME, “will provide legal security and predictability to the market so that agents can prepare and make investments in LPG storage and movement infrastructure.”
The ANP will be responsible for monitoring the prices practiced by companies and will be in charge of applying fines.
If any irregularities occur in price charging, CADE and other competent bodies will be notified to take appropriate action.
As a result of discussions for changes in the gas sector rules, the ANP had already revoked, in July of this year, articles 36 of resolution 49/2016 and 27 of 51/2016, which prohibited LPG distributors from selling kitchen gas directly to consumers.
The commercialization of LPG had been discussed since last year and the approved measure aims to eliminate intermediaries in the sales of liquid fuels and natural gas and increase competition in the sector.
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