Brazilians have felt the successive increases in the price of gasoline, diesel and cooking gas in their pockets. But information on the subject is mixed: Bolsonaro sometimes attacks the state tax (ICMS), sometimes changes the percentage of mandatory biodiesel in oil, and always attacks the main Brazilian state-owned company.
“We have oil and state refineries here and we pay as if we were buying on another continent”
As the coordinator of the Oil Workers Union of Minas Gerais (Sindpetro/MG), Alexandre Finamori, explains in this interview, the persecution of Petrobrás and national sovereignty is not new, but the violence of the current dismantling has the aggravation of the historical moment, amidst a health and humanitarian crisis. Check out the interview.
Why are gasoline and gas so expensive?
By decision of the President of the Republic. Petrobras, even though it is a mixed economy, that is, having shares on the stock exchange, its largest shareholder is the federal government. The price policy adopted by the company, the PPI, is a decision of the current management of the company and the president of the republic could request the change.
ICMS has always been the same, it is not responsible for the increase
PPI is an international parity pricing policy. This means that gasoline, diesel and cooking gas produced by Petrobrás are sold at the price of these same fuels produced in Europe or the United States, plus the cost of transport to Brazil plus import taxes. It doesn’t make any sense, we have oil here, we have state-owned refineries and we pay as if we were buying on another continent.
::Petrobras “indebted” and the fallacies of the speech that preaches the sale of the state-owned company::
What does ICMS have to do with it? Could governors change the price of the tax?
ICMS has a great influence on fuel prices and taxes are really high. However, they always have been, the increase in fuel is not the result of an increase in ICMS. Taxes are important, they finance public policies, social, technological and infrastructure investments, for example, but in Brazil, they weigh on the poorest because we tax consumption. We need to tax the richest and the greatest fortunes.
To pretend it is trying to lower the price of diesel, the government increases pollution in the country
In 2015, when the price of oil was close to today’s value, gasoline cost around R$3.50 a liter and a gas cylinder ranged around R$50. This shows that despite taxes having a large share in formation of fuel prices, they have always existed and what made the price rise was the current price policy of Petrobrás, which is increasing the price of gasoline, diesel and cooking gas in refineries.
What could the federal government do to improve fuel prices?
As Petrobras’ majority shareholder, President Bolsonaro needs to change the pricing policy, the PPI. Even more in the midst of this humanitarian crisis, with many families going hungry and when they get food, they do not have the gas canister to cook, Petrobras needs to fulfill its role as a state-owned company and sell fuel at fair prices, guaranteeing its profit, but respecting the Brazilian population that owns it and all state-owned companies.
This week, Bolsonaro approved the Resolution of the National Energy Policy Council (CNPE) that reduces the addition of biodiesel to diesel oil from 13% to 10%. What does that mean?
This means that, of all the diesel used in Brazil, 13% came from Biodiesel, a green diesel that has a sustainable production logic. And now that percentage will be just 10%. This makes our energy matrix more polluting, going against the need to reduce the environmental damage we are causing on the planet.
Remembering that this decision was taken to try to lower the price of diesel a little, but it is a negligible difference. In addition to having little effect on price, this decree makes clear the values and for whom the Bolsonaro government works. Instead of reducing the price at the refineries, the government prefers to keep the PPI, keeping the profit for the shareholders.
Regap, the Minas refinery, is on the privatization list
To pretend it’s trying to lower the price of diesel, it increases pollution in the country. In short, he makes it very clear that shareholder profit is above social and environmental well-being.
Minas Gerais has biodiesel production, in Montes Claros, but the plant is expected to be sold later this year. What does that mean? How will it impact the lives of workers, but also society in general?
Petrobras, which is an energy company, not just an oil company, is of great importance in the Brazilian energy transition to a cleaner matrix.
In 2008, Petrobrás Biocombustível SA (PBIO), a wholly-owned subsidiary of Petrobrás, was created with the objective of operating biofuel plants and holding equity interest in other companies.
Also in 2010, Petrobrás Biocombustível had stakes in 10 ethanol plants, stakes in Nova Fronteira Bioenergia (GO), Guarani (SP), and Total Agroindústria Canavieira (MG). The 2011-2015 Business Plan foresaw investments of US$ 1.9 billion in ethanol production and the goal of reaching a volume of 5.6 billion liters in 2015 (with partners) and 12% share in the domestic market.
We have already had fuel prices in Brazil below the international standard
The current government, which is an enemy of the environment, in addition to reducing by decree the mandatory use of biodiesel from 13% to 10%, a setback that makes our energy matrix more polluting, is dismantling and selling Petrobrás Biocombustível.
Here in Minas Gerais, the Darcy Ribeiro Biodiesel plant in Montes Claros is for sale and, together with the plant, it is also selling the employees with public exams, as if they were disposable machinery. The clearest scenario for these workers is the precariousness of their jobs and dismissal.
:: Receive news from Minas Gerais on your Whatsapp. Click here ::
In addition, it is necessary to emphasize that the privatization of the Biodiesel plant in Montes Claros harms the development of the regional industry in addition to directly affecting around 9,000 family farmers in the semiarid region. They are part of Petrobras’ agricultural supply program and produce oilseeds to produce cleaner energy, biofuel.
Some refineries have already been sold and others are close. Can you give an overview of the initiatives to privatize Petrobras? And Regap, is it on that list?
Two refineries have already been delivered: RLAM, in Bahia, was sold for half of the market assessed price and REMAN, in Manaus, Amazonas, also with a value below market assessed.
The sale of the two refineries will, in practice, create regional private monopolies and make the price of fuel for the population even more inaccessible. In addition to the precariousness of jobs, the reduction of State investment in these regions, at a time when the resumption of employment needs the State and strong state-owned companies.
Regap, the Minas refinery, is on the list, with sales forecast for October. We, male and female workers, are mobilizing, talking to mayors, parliamentarians and trying to show all the damages to the municipalities, the population and the industry.
Finally, why precisely this sector has been so attacked in Brazil in recent years? Could it be different? Could we pay less for fuel and still invest oil resources in other areas of the country’s development?
The interest in oil is not new. Oil has been the cause of several wars in the world, invasions, conflicts in the Middle East, in Latin America, advances on democracies.
Right here in Brazil, we have the campaign “O Petróleo é ours”, which was born at a historic moment when international private interests competed for dominance in oil with the Brazilian population. But popular force managed to create a strong state-owned company, Petrobras.
Since then, we have already gone through privatization attempts with Collor, with Fernando Henrique. Interest in Brazilian oil is constant, it does not end. Brazil is experiencing a new wave of attack on its energy sovereignty.
Yes, it could be different. Let’s remember that, even during Dilma’s government, it was approved that the resources, the oil royalties, would be invested in health and education. We had projects involving the oil industry, in which percentages should be of national technology. These public policies transform oil profits into industries and social programs.
Also remembering that we have already had stable fuel prices in Brazil and well below the international standard. Because today we have an oil extraction of around U$ 7 dollars in the pre-salt. It makes no sense for the population to pay as if it cost U$ 70 dollars, as is the international market price.
A pricing policy that guarantees the company’s profit and financial health and also respects the population is possible. More than possible, it is an obligation of any president. How much more so in this moment of sanitary and humanitarian crisis, in which the population, for the prohibitive price, finds it difficult to buy food and cooking gas.
Petrobras is a state-owned company, the Brazilian population is the priority shareholder. The price of fuel today is a decision of the President of the Republic.
Source: BoF Minas Gerais
Edition: Elis Almeida