Petrobras Headquarters in ES Under Federal Government’s Radar: Does Structure Influence Fuel Prices?

President Claims That Brazil Is Self-Sufficient in Fuel Issue, But Says He Has No Power Over Petrobras and Will Not Tear Contracts

The recent rise in fuel prices is criticized by the Federal Government. President Jair Bolsonaro mentions a building that, according to him, costs over R$ 300 thousand per month and is underutilized. “We have a very beautiful building in Vitória that is more than half underutilized, and the trend is for 90% of the building to no longer be used. We will sell it, [but they say] ‘President, you can’t sell it, no one will want to buy it because the building was built on rented land’,” said Bolsonaro.

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“R$ 1.7 million per month for land rent. It’s like a loan shark, who doesn’t want you to pay the bill, wants to get his money every month. Loan sharking, in quotes, with public money. Who pays the bill? All of you who put fuel in your cars,” said the president.

President Says He Has No Power Over Petrobras and Wants Not to Tear Contracts

“People complain about Brazil, about the rising prices of goods, of fuel. No one does this on purpose. I have no power over Petrobras. I will not just freeze fuel prices with a stroke of the pen. Many want me to, but we’ve already had experiences with freezing in the past,” said the president.

Bolsonaro stated that Brazil is self-sufficient in fuel and mocked the questions about the pricing policy. “When we talk about fuel, we are self-sufficient. Oh, but why is the price tied to the dollar? Can I just tear contracts now?” he said.

The president also mentioned other factors that contribute to the final price, such as ICMS, freight, and the profit margin of those who sell fuel at the pumps. “Whose fault is it? Bolsonaro’s,” he joked. “I’m not shirking my responsibility, I’m showing the truth.” The price of gasoline per liter in the country rose by 2.47% in September compared to August, reaching a national average price of R$ 6.309. After a year and four months of consecutive increases, the fuel price has accumulated a rise of 57.33% since May of last year.

State Policy Is Determinant for Constant Increases in Fuel Prices

Petrobras’ policy is determinant for the increases, Carla Ferreira, a researcher at Ineep (Institute of Strategic Studies on Oil, Natural Gas, and Biofuels, linked to the Federation of Oil Workers), states that the most important part of the increases in consumer prices is linked to the hikes promoted by Petrobras.

According to her, the adjustments are a result of the company’s pricing policy adopted in 2016. The guideline ties the prices practiced in Brazil to the value of a barrel of oil in the international market, charged in dollars. With the dollar high, prices in Brazil also rise. Since the beginning of the year, gasoline has accumulated a 51% rise at refineries.

It is clear that, as the ICMS is a percentage of the final price, when the price rises, revenue increases. But it is not the villain of the current increases. The big question is the price that comes out of the refinery, which comes from the import parity policy, says Carla Ferreira.

According to Ferreira, an example that taxation is not the determining factor for recent increases was the low impact that the exemption of PIS and Cofins, two federal taxes, had on diesel prices. Despite the tax cut being R$ 0.31, the reduction at the pump was only R$ 0.03.

Watch a Video Below in Which the President Mentions at Another Time the Headquarters of Petrobras, Built on Rented Land in ES