MercoPress. South Atlantic News Agency

Brazil's Senate wants to tackle fuel prices

Petrobras' International Price Parity policy makes the price of fuel too jumpy for local consumers

Brazil's Senate Speaker Rodrigo Pacheco Monday said that come February he intends to put up for voting a bill aimed at creating stability in the price of fuel.

Senator Rogério Carvalho's project foresees the formation of prices for oil-derived fuels taking as a reference the average prices of the international market, the internal costs of production and those of imports, it was reported. The idea is “to protect the interests of consumers, reduce external vulnerability and the constant variations of internal prices,” Carvalho argued.

Currently the formula for calculating fuel prices is based on the International Price Parity which, in Carvalho's opinion, “has consequences for the entire economy, to the detriment of the most vulnerable.” He added that the time has come when it has become necessary “to discuss Petrobras' pricing policy, the way it encourages imports and the alternatives to it is reinforced,” following yet another price increase of around 4.85% in the prices of gasoline last week.

Petrobras highlighted in a statement that such adjustments were important to ensure that the market continues to be supplied and avoid shortages in the near future. The company also maintained that the adjustment ”reiterates its commitment to the practice of competitive prices and in balance with the market, accompanying the upward and downward variations, avoiding the immediate transfer to internal prices of external and exchange rate volatilities.”

The Brazilian Institute of Geography and Statistics reported that in 2021 Brazil registered an annual inflation of 10.06 percent, the highest figure since 2015 when it reached 10.67 percentage points, essentially due to fuel prices, which went up around 44% at pumps.

Pacheco said that “I will submit [the bill] for evaluation by the College of Leaders at the beginning of February. The intention is to guide. Senator Jean Paul Prates will be the speaker and he is dedicating himself a lot to the subject.”