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The impact of TFPG on the Oil and Gas sector
The Brazilian Institute of Oil and Gas (IBP), the leading voice of the sector in Brazil, expressed its surprise and concern with the recent approval of the “Tax for Control, Monitoring and Inspection of Oil and Gas Exploration and Production Activities” (TFPG ) by the government of the State of Rio de Janeiro. This measure is seen as a setback in policies aimed at the oil and gas sector, potentially bringing significant negative impacts on exploration and production activity in the state.
The sanction of the TFPG by the state government resurfaces in a delicate context, as similar measures were previously considered unconstitutional by the Federal Supreme Court. Furthermore, the imposition of this tax threatens the competitiveness of the state of Rio de Janeiro, reducing its attractiveness and potentially diverting investments in oil and gas projects to other regions that do not apply this tax.
Rio de Janeiro: major contributor and producer of Oil
It is important to highlight that companies in the oil sector are already major contributors to the economy of the state of Rio de Janeiro. In 2022, the state and its municipalities received approximately R$27 billion in royalties from the oil industry, according to data from FIRJAN. These investments are crucial, as they place Rio de Janeiro as the largest oil producer in the country, responsible for 87% of national production, with growth expected to reach 91% in 2025.
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Repercussions of the decision for the future
The IBP regrets the decision of the governor of Rio de Janeiro, emphasizing that the implementation of the TFPG may negatively affect the attractiveness of the state as a destination for future investments. This situation has the potential to impact the generation of jobs and income in several municipalities, significantly harming local development.
The institution of the TFPG appears as a challenge for the oil and gas sector in Rio de Janeiro, calling into question the sustainability and continued growth of an industry vital to the state's economy. IBP remains vigilant and active in the search for solutions that minimize the impacts of this new legislation, maintaining Rio de Janeiro as an attractive and competitive hub in the oil and gas industry.
Source: Rodrigo Dutra
