Confaz Update Alters Tax Calculation Base and Affects Gasoline, Ethanol, Diesel, CNG, and Aviation Kerosene Starting in June
The National Finance Policy Council (Confaz) announced, on May 22, 2025, the review of the Average Price Weighted to Final Consumer (PMPF) of fuels. The measure was published in the Official Gazette of the Union the next day and will take effect on June 1. This update, which occurs periodically, serves as a mandatory reference for the tax calculation base of ICMS (Tax on Circulation of Goods and Services) in Brazilian states.
Understand How PMPF Directly Influences Pump Prices
The PMPF serves as a parameter for charging ICMS on various fuels such as regular gasoline, hydrated ethanol, diesel oil, compressed natural gas (CNG), and aviation kerosene. Although the adjustment does not determine immediate increases to consumers by itself, it may indirectly affect the prices charged at the pumps. This happens because the state tax value is based on this disclosed average price. Thus, any change in PMPF tends to influence market behavior.
Update Was Made Based on State Price Variations
According to Confaz, the review aims to more accurately reflect the average prices practiced in the states. Ethanol was the only fuel whose values for all states were updated and disclosed in full. This action ensures greater alignment between the reality of regional prices and tax collection. The procedure, therefore, is essential to ensure that the calculation base for ICMS is fair and updated frequently in line with market dynamics.
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New Average Weighted Price Does Not Automatically Change the Consumer Price, but Impacts Transfers
Although the new PMPF is used to determine the value on which ICMS is applied, the change does not automatically imply an increase or decrease in the final price to the consumer. However, it may influence distributors and gas stations, which could result in adjustments to the prices charged. States with a high reliance on ICMS revenue from fuels tend to be the most sensitive to these changes. Therefore, revisions have a strong fiscal impact, even if the reflection for consumers takes a few days to appear.
PMPF Update Reinforces Fiscal Transparency and Contributes to Balance in State Revenue
Confaz performs the PMPF update as part of a regular routine. The purpose is to maintain coherence between the behavior of the fuel market and the calculation base used by the states. This practice aids transparency in the tax process and helps federal entities better plan their revenue. The publication of updated values is a legal requirement and is part of the fiscal management policy that seeks balance between revenue and economic reality.

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