Will Fuel Prices Decrease? See Some Actions Being Taken to Lower Gasoline and Diesel Prices

Fuel Prices in Brazil Are Very High. Actions in Brasília Seek to Lower Pump Prices for Brazilians

The fuel prices are at unprecedented levels. Both diesel and gasoline are priced very high at the pump. Gasoline, for instance, is already being sold at some stations for no less than R$ 7 reais per liter.

• Six companies will compete with Petrobras for the distribution of Gas in the Center-South
• Brazil’s ethanol and sugarcane sector may gain a new mill, increasing processing capacity
• Sugarcane mills should prioritize sugar production this year
• Norsk Hydro cancels agreement with Golar LNG for the supply of liquefied natural gas to Alunorte in Pará
• Export: More than 2.67 billion liters of ethanol were exported by Brazil in 2020, the highest number for the industry in seven years

To alleviate the impact of rising fuel prices on Brazilian wallets, some projects are being proposed in Brasília. 

What Is Being Done in Brasília?  

This year, the federal government eliminated the incidence of PIS and Cofins for two months. At the same time, a Complementary Bill is under discussion in the Chamber, presented by Deputy Emanuel Pinheiro, which proposes charging the ICMS not by a percentage, but by the amount of fuel purchased.

Another action was the provisional measure signed by President Jair Bolsonaro that authorizes the direct sale of ethanol by producers or importers. This way, the companies would be bypassed. 

Deputy Kim Kataguiri presented an amendment that proposes the use of a system similar to that of the United States, where attendants are not used:  

“Fuel resellers can offer partially or fully automated services for operating fuel pumps, dispensing with the intervention of attendants or any other professional.’’ 

In this case, if the amendment is approved, fuel stations will be able to offer a self-service system, without a person to assist in fueling. 

Center-South May Produce More Ethanol 

The sugarcane crushing in the Center-South of Brazil for the 2021/22 period was estimated at 533 million tons, having a decrease of 7.5% compared to the forecast made in May due to drought and frosts, as predicted by JOB Economia. However, the production forecast for ethanol had a slight increase due to high prices in Brazil.

The production of cane ethanol in the Center-South stood at 25.10 billion liters in 2021/22, showing an increase of 2.45% compared to the last projection. Meanwhile, the projection for sugar production was estimated at 33.4 million tons.

Júlio Maria Borges, managing partner of the consultancy, spoke about the ethanol production projection: “It was a reversal of expectations. Industries are producing more ethanol than expected,” he told Reuters.