Marcelo Araujo, President of Ipiranga and the Oil and Gas Refining Council of the Brazilian Institute of Oil and Gas (IBP), considers it natural that the rise in fuel prices has entered Brazil’s political agenda in recent months. “What strongly influences society ultimately becomes a political issue,” he says in an exclusive interview with the channel. Estadão / Broadcast… Read the main passages below:
What explains the recent rise in fuel prices?
We have cyclical issues that are affecting prices right now. Therefore, historically, they are at a very high level. The conjuncture is the exchange rate, high commodity prices, which also put pressure on biofuels. There are macroeconomic solutions for them. But structural ones will not dare if we do not change something.
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What needs to be changed?
The first obstacle is tax. We have the most complex fuel taxation system in the world. The ICMS is even more complex because it is state-specific and is calculated based on a percentage of the sales price to the consumer. As a product becomes more expensive, tax volatility increases. This contributes to tax evasion.
What can be done?
Simplifying this process will make it easier. This is a constructive solution that reduces the price. The proposal that was discussed, and the government included it in two bills, is the unification of ICMS rates, which will be fixed in volume, and not in a cascade along the entire chain. These measures are of fundamental importance to the country as they structurally lower fuel prices.
Can tax changes be approved during the economic and political crisis?
This is the best time for discussion, because everyone is feeling it (rising fuel prices). It’s more of a policy coordination issue. Fuel is the main source of income in the States. It’s no use blaming the oil (fuel consumption). A barrel costs $ 73. The average over the past ten years was $ 70. We do not support artificial pricing models because they are not sustainable over time.
What needs to be done to lower the price?
Investment, on the one hand, and tax restructuring, on the other, is what solves the problem. You can’t do a miracle. You can’t keep inventing an artificiality that solves a situational problem but doesn’t attack a structural one.
The discussion of fuel prices has moved into the political sphere. Does it bother you?
What strongly influences society eventually becomes a political issue. Public debate is highly welcomed. We must expand it. We need to solve a tax problem. Another way to solve the problem is investment. This increases efficiency. But this requires regulatory predictability.
The sale of fuel of any origin at petrol stations is permitted with the conclusion of exclusive agreements with distributors. Does it bother you?
It is not found anywhere in the world. This measure violates fundamental principles. The first is the right to freedom of commercial relations between autonomous agents. This measure can still confuse a consumer who enters a particular brand’s service and ends up buying something of unknown origin and quality.
How are new payment technologies and applications changing the industry?
Consumers are increasingly looking for solutions to most of their problems with fewer service providers. The trend is the use of payment apps and loyalty programs, which will make prices increasingly individualized depending on the degree of customer relationship with the brand.
Information from the newspaper State of Sao Paulo.
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