Gas Distributors in SP Must Refund R$1.9 Billion to Consumers After Supreme Court Action

The Gas Distributors in SP, Composed of Comgás, Gas Brasiliano, and Naturgy, Will Have to Refund R$ 1.975 Billion to Consumers, According to a Decision by the Supreme Federal Court (STF) That Imposes the Exclusion of ICMS From the Calculation Base of PIS/Cofins.

Arsesp, the São Paulo regulatory agency, proposes the full restitution of the tax credits received by the franchisees through tariffs. Thus, Comgás will have to refund about R$ 1.8 billion; Naturgy, R$ 123 million; Gas Brasiliano, R$ 51 million.

The distributor challenged Comgás’s assertion that the credit should be considered additional revenue for the franchisee. This decentralization prevents the distributors from seeking efficiency in franchise management.

What Does the Lawsuit Against Gas Distributors in SP Say

In the maximum price regulatory model adopted by the Gas Distributors in SP, efficiency gains are greater than regulators expect, resulting in financial gains for the franchisees. From the consumer’s perspective, Abrace does not see the credit as extraordinary income. The association believes that the search for reasonable tariffs is a kind of duty of the concessionaires, which is stipulated in the contract.

It also requests Arsesp to allow the credit to extend beyond captive environments and be considered when end customers migrate to free gas markets, so as not to hinder market opening. The public consultation on Arsesp’s proposal ends this Tuesday (10). Other states, such as Pernambuco and Rio de Janeiro, also discussed the topic. In the electricity sector, refunds are governed by law.

In 2022, the National Assembly approved Law 14,385/2022 to regulate the full reimbursement of most of the tariffs charged to energy consumers. Abradee, which united the distributors, filed a constitutional action against the STF.

Cheaper Gas Within Gas Distributors in SP

The selling prices of gas from Petrobras will decrease by an average of 11.1% until February 1st. This is a quarterly adjustment, reflecting the drop in the price of Brent oil and the reduction in the pricing formula.

The contract updated at the end of 2021 stipulates that the Brent index in the gas pricing formula will be reduced from 16.75% to 14.40%. This is the price at which Petrobras sells gas to the distributors. The final cost to the consumer depends on the tariff adjustments approved by the states, which also include freight costs and other factors.