1. Home
  2. / Economy
  3. / Prepare your wallet: fuel prices will rise
reading time 5 min read Comments 4 comments

Prepare your wallet: fuel prices will rise

Written by Alisson Ficher
Published 25/01/2025 ร s 20:17
Get ready: fuel prices in Brazil may rise due to the gap between prices and the international market. Understand the impacts!
Get ready: fuel prices in Brazil may rise due to the gap between prices and the international market. Understand the impacts!

Brazil may face increases in fuel prices, even with the government's attempt to prevent the increase. The gap between domestic and international prices, the rise in the dollar and the appreciation of oil are putting pressure on the market. Experts point out risks such as shortages and billion-dollar losses for Petrobras. Understand the dilemmas that affect your pocket.

The price of fuels in Brazil, such as gasoline and diesel, is about to face a new rise, despite the government's efforts to avoid such a scenario.

In detailed analysis, Fernando Ulrich, a renowned economist, highlighted on his YouTube channel the main factors that contribute to this imminent rise in prices.

According to him, the gap between domestic values โ€‹โ€‹and those practiced on the international market has reached alarming levels, creating a situation that challenges both the government and Petrobras.

Ulrich clarified that the gap is the difference between the prices charged in Brazil and the values โ€‹โ€‹established in the international market.

This disparity has intensified due to the price freeze policy adopted by Petrobras. โ€œDiesel, for example, has not been adjusted for more than a year, while gasoline has not been changed for more than six months,โ€ said the expert.

He highlighted that, although this strategy aims to control inflation, it also brings significant risks, such as supply shortages and billion-dollar losses for the state-owned company.

The international market and its impact on Brazil

On the global stage, the prices of oil and its derivatives have been increasing steadily.

According to data presented by Ulrich, the price of a barrel of oil has appreciated significantly in recent months, driven by a combination of factors, such as geopolitical tensions, increased demand and supply constraints.

This movement has a direct impact on fuel costs on the international market.

To further complicate the situation, the devaluation of the real against the dollar contributed to amplifying the impact of these increases in Brazil.

The dollar is currently trading at over R$6, which increases fuel import costs. Ulrich explained that in the last three months, diesel and gasoline prices have risen by 12% and 6% in dollar terms, respectively.

However, due to exchange rate fluctuations, this increase was even greater in reais, reaching almost 19% in the case of diesel.

This situation directly affects the fuel import sector. According to the Brazilian Association of Fuel Importers (Abicom), around 25% of the diesel consumed in Brazil is imported.

When Petrobras chooses to keep prices below the international market, importers face difficulties in competing, which can lead to a reduction in supply and the consequent risk of shortages.

The government's strategy and its limitations

Despite the alarming data, the federal government has resisted the idea of โ€‹โ€‹readjusting fuel prices.

The main concern is the impact that such a measure would have on inflation, which is already putting pressure on the population's cost of living.

โ€œRaising the price of gasoline and diesel would have cascading effects, making transportation, food and other essential goods more expensive,โ€ Ulrich analyzed.

He added that the political impact is also a relevant factor, especially considering that President Lula's popularity could be further affected by a significant increase in fuel prices.

However, this strategy also has its weaknesses. Ulrich warned that insisting on avoiding adjustments could lead to serious consequences, such as financial losses for Petrobras and the loss of credibility of the government in the markets.

According to him, the state-owned company has already accumulated losses of R$9,3 billion due to the price discrepancy.

โ€œThis freezing policy is not sustainable in the long term and could compromise the companyโ€™s financial health,โ€ he said.

Possible solutions to the dilemma

Faced with this scenario, Ulrich pointed out some possible solutions.

One of them would be the reduction of public spending, which would help to stabilize the exchange rate and, consequently, alleviate the fuel price gap.

He explained that the government's recovery of fiscal credibility could attract more investors and reduce pressure on the dollar.

Another alternative would be to gradually adjust fuel prices, rather than making a single abrupt increase.

This could mitigate inflationary impacts and facilitate acceptance by the population.

However, Ulrich stressed that this approach requires planning and effective communication from the government, something that has not always been prioritized.

Furthermore, he highlighted the importance of investing in expanding refining capacity in Brazil.

Currently, the country depends significantly on fuel imports, which makes it vulnerable to fluctuations in the international market.

Investments in refining infrastructure could reduce this dependence and strengthen the country's energy security.

an uncertain future

The current scenario is challenging and reflects the government's political and economic choices.

Ulrich concluded his analysis by stating that Brazil is facing a vicious cycle, in which measures adopted to contain inflation and protect the population from fuel price increases end up worsening fiscal and monetary problems.

โ€œEvery government action seems to be pushing the country into an even more complicated situation,โ€ he assessed.

Meanwhile, consumers should prepare for a possible increase in fuel prices, especially diesel, in the short term.

According to Ulrich, the gap has reached an unsustainable point and should force the government to act soon.

It remains to be seen how the government and Petrobras will balance economic, social and political interests in this challenging scenario.

Be the first to react!
React to article
Registration
Notify
guest
4 Comments
Older
Last Most voted
Feedbacks
View all comments
Vandir
Vandir
26/01/2025 08:58

LULA WARNED, THE BIG THING IS STILL COMING AND THIS TIME IT WILL HURT DEEP.
DO OL NOW **** OF ****.

Rubens Jose Lucas
Rubens Jose Lucas
26/01/2025 11:35

I would like to know what is new about the increase in oil prices in Brazil and in this government.

Antonio
Antonio
26/01/2025 18:05

With this misgovernment, things are going from bad to worseโ€ฆ useless.

Alisson Ficher

Journalist graduated in 2017 and working in the field since 2015, with six years of experience in print magazines, stints on broadcast TV channels and over 12 online publications. Specialist in politics, jobs, economics, courses, among other topics. Professional registration: 0087134/SP. If you have any questions, want to report an error or suggest a topic on the topics covered on the site, please contact us by email: alisson.hficher@outlook.com. We do not accept resumes!

Share across apps
0
We would love your opinion on this subject, comment!x