Governor of Rio de Janeiro Wants to Negotiate ICMS Rate Reduction to Lower Fuel Prices

With the goal of contributing to help consumers in Rio de Janeiro afford gasoline at a more affordable price, Governor Cláudio Castro negotiates the reduction of a part of the ICMS, which is responsible for 15% of the state’s revenue

Cláudio Castro, Governor of the State of Rio de Janeiro, states that he agreed to negotiate a reduction of the ICMS rate to help reduce fuel prices. The governor wants other sectors that influence the final consumer price to contribute as well. The measure could bring significant relief to consumers, as the ICMS represents a large part of the product’s price.

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Fuel Prices in Rio de Janeiro Already Reach R$ 7

With the highest ICMS rate in Brazil, Rio de Janeiro retains 34% of the amount paid for fuels by the final consumer. With the rising oil prices and a high dollar, the price of the product in Rio de Janeiro skyrocketed and is already at R$ 7 in several municipalities.

According to the Governor during an event in Rio de Janeiro, everyone who needs to fuel up notices that prices are high. The ICMS will be reduced, but only if it is done proportionally for all consumers.

“If the governor, the federal government, and the municipalities cut two or three percent, it would already have a significant positive impact”, highlighted Claudio. The governor states that what he wants is to ensure that positive results will reach the consumer.

Taxes Represent 47.18% of Fuel Prices

According to the Governor of Rio de Janeiro, the ICMS is responsible for 15% of the state’s revenue and there is no possibility for the government to waive the entire tax. Currently, taxes account for 47.18% of fuel prices, meaning that if taxes were eliminated, the prices of gasoline, ethanol, GNV, and diesel could drop by nearly half.

According to the governor, his team conducted tests, and of the R$ 341.69 refueled at a gas station on the RJ-106 highway in Maricá, in the metropolitan region of Rio, R$ 161.27 was from taxes, with R$ 116.85 being ICMS and 12.99% from federal taxes.

On the last Friday (10th), Petrobras launched a campaign to clarify the composition of prices to end consumers and stated that the ICMS is one of the main reasons for the price, according to President Jair Bolsonaro’s stance.

The president of the state-owned company, Joaquim Silva Luna, further states that it is not the time to point fingers at any government or Petrobras; what is needed is to sit down and observe how everyone can give a little to lower fuel prices, since end consumers should benefit.

Mato Grosso do Sul Will Also Waive the ICMS

Governor Reinaldo Azambuja will also waive the ICMS, but not for fuels; instead, for another priority in the lives of Brazilians that is rising: the electricity bill.

Due to the new tariff created by Aneel because of the water crisis, consumers are paying R$ 14.20 extra for every 100 kWh consumed.

The governor had previously stated he would eliminate the tax, but Aneel created a new tariff structure, prompting the government to develop a new project. The proposed law is being submitted to the Legislative Assembly this Tuesday (14th) and intends to waive 3% of the ICMS rate in the tariff, allowing residents of Mato Grosso do Sul not to pay the tax during the validity period.