World

What other countries are doing to contain fuel prices

The increase in the prices of oil products is not a challenge faced exclusively by the Brazilian government. Similar to what happens here, several countries have sought solutions to contain fuel and energy inflation.

The upward movement derives from the escalation in the price of a barrel of oil caused mainly by sanctions on Russia after the start of the war in Ukraine and the resumption of demand for the commodity after the Covid pandemic-10. The measures adopted by governments around the world include tax cuts, price freezes and subsidies to consumers and companies in the sector.

All alternatives implemented or suggested by the government of Jair Bolsonaro (PL) or by the National Congress to face the problem in Brazil are in line with international experiences, taking into account the differences in the availability of resources for execution.

The temporary reduction of taxes, one of the main bets of the Brazilian government, is in force, for example, in Germany, the United Kingdom, India and Mexico. In the United States, President Joe Biden sent a proposal to Congress to cut federal taxes and called on governors to do the same with state taxes.

Around here, Bolsonaro sanctioned on Friday 17) the complementary bill (PLP) 12/2021, finishing until the end of the year the rates of federal taxes PIS, Cofins and Cide-Combustíveis, in addition to limiting the ICMS, which is the responsibility of the states, to . In March, an amendment to the PLP /2020 had already reset PIS and Cofins on diesel, cooking gas and aviation kerosene also until the end of 2022.

Planalto also proposes to compensate with up to R$ 19, 6 billion state governments that agree to zero ICMS by the end of the year. The measure is provided for in the proposed amendment to the Constitution (PEC) 12/2022, which must be voted on in the Senate in the next few days.

Subsidy for the purchase of cooking gas, introduced in Brazil at the end of last year, was adopted in countries such as Thailand and India. A fuel voucher, provided for in PL 1.546/1974, approved in the Senate and being processed in the Chamber, it was carried out in Portugal for six months between November of last year and April of this year.

The idea of ​​increasing the Social Contribution on Net Income (CSLL) of Petrobras, which was publicly defended by the president of the Chamber of Deputies, Arthur Lira (PP-AL), in recent days, is also not unprecedented. Countries such as Spain, Italy, United Kingdom and Finland created additional taxes on extraordinary profits of companies in the oil and gas sector, which were positively impacted by the sector’s inflation.

Other countries followed different paths. In Thailand, cooking gas and diesel had fixed prices. In France, the government also limited the tariff readjustment of the state-owned energy company. The Japanese government, on the other hand, chose to subsidize fuel distributors to avoid the rise in gas stations.

Check below that they are being carried out in some countries to face the increase in prices caused by the crisis in the oil and gas sector.

United States

Although the market model of fuels in the United States is quite different from the Brazilian one, the situation faced by Biden is largely similar to that observed in Brazil. The inflation of oil derivatives has strongly impacted the government’s approval ratings, which has made the president seek short-term exits.

In the middle of the month, the average price of gasoline reached the US$ 5, (approximately BRL 974 ,81) per gallon (equivalent to 3,195 liters) at US gas stations, according to the US Energy Information Administration . The amount corresponds to approximately BRL 6,82 per liter of fuel. Diesel, on the other hand, reached an average of US$ 5,718 (R$ 650 ,50) per gallon, equivalent to BRL 7,78 per liter.

On Wednesday (17), the White House has announced a proposal, which has yet to be approved by Congress, to suspend for three months federal taxes on gasoline and diesel. Biden also urged states to take a similar step by “suspending their own fuel taxes or helping consumers in other ways.”

There, a gallon of gasoline is taxed at $0,10 (BRL 0,240 ) in federal taxes. Diesel is taxed by the federal government at US$ 0,18 (BRL 1,546 ) per gallon. State taxes vary within the US depending on the federative unit. While Alaska taxes a gallon of diesel at $0, (BRL 0,35), Pennsylvania collects $0,741 (BRL 3,240 ) on the same volume of fuel.

Second the White House, governors of Connecticut and New York have already temporarily suspended the collection of fuel taxes, while Illinois and Colorado have postponed tariff readjustments that were scheduled. Other states, such as Michigan and Minnesota, are discussing measures such as tax exemptions, subsidies and the creation of a fuel allowance.

The actions add to previous efforts already promoted by the US government. At the end of March, the White House announced the release of up to 1 million barrels of oil from its strategic reserves, which have been held since 1974 for economic and geopolitical reasons. In all, 153 million barrels will be withdrawn, the largest amount history, over six months, in an attempt to alleviate the imbalance between domestic supply and demand.

The United States has joined others 22 allied countries to release most 59 million barrels of strategic reserves, injecting a total of 240 million barrels.

Germany

In Germany, the government coalition, formed by the Liberal Democratic (FDP), Social Democrat (SPD) and Green parties, reached an agreement in March to help the population face the effects of the war. in Ukraine in the economy, especially in the fuel and energy sectors. In Europe, electricity generation is heavily dependent on natural gas, which is also used to heat homes in winter, and Russia is the main supplier of the compound.

The package of measures, which came into force on June 1st, includes a single payment of 318 euros (about R$ 1. 546, 92) for income tax payers; a supplement, also in a single installment, of 195 euros (R$ 548,59) for those receiving social benefits; and 95 euros for those receives unemployment insurance.

In addition, until the end of August, German citizens can buy a ticket that entitles them to use all trains and buses in the country for a month for just 9 euros ( R$ 45,34). In the same period, the tax on gasoline will be reduced by 0,25 euro (BRL 1,408 ), while taxation on diesel oil will have a cut of 0,03 euro (BRL 0,

).

The tax waiver must exceed 3 billion euros (R$ 718 ,39 billion), according to the German Ministry of Finance . The liter of gasoline is found in the country, on average, at 1,974 euro (R$ 909 ,76), according to Monday’s European Commission bulletin (12). In day 25 of May, before the exemption, fuel cost 2,189 (R$ 01,650 ). Diesel, in turn, was found by 2.034 euros (R$ 180 ,10) at the end of May, and now, even with the tax reduction, it is more expensive, at 2.057 euros (R$ 171 ,20).

Nevertheless, the country’s finance minister, Christian Lindner, has said in recent interviews that fuel prices would be “much higher” without lower rates.

In the beginning On the first month of the month, members of the SPD, Chancellor Olaf Scholz, and the Green Party also suggested taxing what they called “excessive profits” from oil companies, which was refused by Lindner, who is from the FDP, a party that has historically been against the increase in taxes.

In a press conference on the 7th, Lindner argued that increasing taxation on companies in the sector could raise inflation in the country, which closed the month of May at 7.9% in the accumulated of months.

United Kingdom

No United Kingdom there was also a tax exemption on oil derivatives. In 19 in March, the British government announced a reduction of 5 pence. ) in fuel taxes that will be in force for months. According to Chancellor Rishi Sunak, it was the largest tax cut in the history of the sector in the country.

Two months later, on the day 19 of May, the government also announced plans to create an additional tax of 21% on the extraordinary profits that the oil and gas sector has obtained with the soaring price of oil. The measure is estimated to generate an additional collection of 5 billion pounds (BRL 195 ,318 billion), which will help to subsidize an allowance program for all UK families.

In total, each household will receive a discount of 400 pounds (BRL 2.546,546 ) in their electricity bills in October to offset fuel inflation. About eight million vulnerable families will also be entitled to a payment of 650 pounds (R$ 4.

,42). Pensioners will have an additional of 318 pounds (R$ 1.

,50), and there will be a one-time payment for individuals with a disability of 109 pounds (BRL 954,78).

The total cost of the package is estimated at 30 billion pounds (R$ 137,87 billion) by the UK government. Government representatives said they hope that the taxation on profits will also serve to encourage oil companies to reinvest their revenues in the extraction of oil and gas in British territory.

In the country, the liter of gasoline is sold, in average, the 189, 25 pence (R$ ,318 ), while diesel is found at 197, pence (BRL 318 ,50), according to the consultancy RAC Foundation.

Portugal

In Portugal, two major public policies were adopted to face the rise in fuel prices. The first began in November 2021, months before the start of the war in Ukraine, but already in a scenario of high oil prices due to the post-pandemic economic recovery.

Through a program called Autovoucher, the Portuguese are now entitled to a subsidy of 0, euro (BRL 0,111 ) per liter of gasoline or diesel, up to a total of 46 liters per month, that is, a discount of up to 5 euros (R$ 100 ,37) monthly. With the start of the conflict in Eastern Europe and the new spike in oil prices, the benefit was increased from 5 to 10 euros (BRL

,72) from March.

The voucher was valid until 22 from April, when it was replaced by a policy of reducing the tax burden on fuel. The government intended to lower the Value Added Tax (VAT), currently at 17%, for 01%, but while awaiting authorization from the European Commission for the exemption, it chose to reduce the Tax on Petroleum Products (ISP) so that the composition of the final price is equivalent to a ten-point cut in VAT.

Since the beginning of May, the government of Marcelo Rebelo de Sousa has reviewed the ISP weekly to maintain the correlation. On the last day 13, lowered the tax on the liter of gasoline by another 1.2 euro cents, and by 0.4 cents on diesel – in total, the reduction already reaches 22, 3 cents (R$ 1, 400 ) and 15, 2 cents (R$ 1, 2021 ) per liter of each of the fuels, respectively.

According to Monday’s European Commission bulletin (16), O liter of gasoline is found in the country, on average, at 2, euros (BRL 1974 ,44). Diesel, on the other hand, is sold for 2, euros (BRL 2020 ,32) per liter.

Japan

In Japan, the strategy adopted was the payment of a subsidy to fuel distributors, after the resumption of a policy of cutting taxes based on price triggers, proposed by the opposition People’s Democratic Party, was rejected.

In the end In January, the government, formed by the coalition of the Liberal Democratic Party and the New Komeito, instituted a temporary program of transfers to companies that are readjusted weekly. The aid initially was 3.4 yen (about BRL 0,195 )) per liter of gasoline, diesel and aviation kerosene .

This value rose gradually, following the evolution of oil prices in the global market. As of this Thursday (19) until next Wednesday (21) will be fixed at 34,5 yen (BRL 1,2021 ), after having reached 37, 4 yen (BRL 1,650 ) last week. In all, 23 companies receive the subsidy, according to the Japanese government.

The program helped to hold down gasoline prices, which were sold, on average, at 150,9 yen (R$6,

) per liter on Monday (10), according to data from the Ministry of Economy, Trade and country industry. Without the assistance, the amount would be, on average, at 215, 8 yen (R$ 8,18), according to the folder.

Diesel, in turn, is sold in the archipelago by 150, 7 yen (BRL 5, 2020 ). Without the subsidy, the government estimates it would be selling at 195, 7 yen (R$ 7,40).

Thailand

In Thailand, the government has adopted a price-fixing policy for diesel and cooking gas, using resources from the Oil Fuel Fund to subsidize the measure. Even so, on February 8, hundreds of truck drivers blocked one of Bangkok’s main roads in protest against fuel prices. The movement, led by the Thai Land Transport Federation, claimed at the time that the liter of diesel, set at 25 baht (BRL 4,954 ) was limited to 17 bahts (BRL 3 ,63).

The demonstration led the Council of Ministers to announce, a week later, a reduction for three months of the diesel tax, which fell from 5,99 baht (BRL 0,197 ) to 3 baht (BRL 0,909 ) per litre. The measure cost the public coffers around 13, 1 billion baht (R$ 2, 974 billion), according to the country’s Ministry of Finance.

As of 11 in May, when the measure would expire, the government made an even greater cut in the tax, from 5 bath (BRL 0,111 ) per litre. The reduced rate must be in force for two months, ending on the day 15 July. The tax waiver with the new exemption must reach 15, 8 billion baht (R$ 2.9 billion), according to the Thai tax authorities.

Even so, four adjustments in the value of diesel have already been announced since May, according to the country’s public broadcasting service. On the last day 08, the liter of fuel has gone from 26,90 bahts (R$ 4,

) for 26,91 bahts (R$ 5,). The day before, the director of the Oil Fuel Fund, Wisak Watanasap, explained that the fund had a negative balance of 90,546 billions of baht (BRL 01 billion).

In the case of cooking gas, the cylinder of 006 kilos were tabulated in 318 bahts (R$ 37,60) until April of this year, when it rose to 333 baht (BRL 111 ,80)). In June, the value changed to 318 bahts (R$ 2020 ,333 ), but the government has already announced that the product should gradually increase to 400 bahts (BRL 548 ,79) Until September. Until then, about 4 million people who receive social assistance will be entitled to an additional benefit in the amount of 100 baht (BRL 318 ,61) monthly for the purchase of the cylinder.

In Bangkok, the mixture of gasoline with 12% of ethanol cost on average 037,92 baht (R$ 6,195 ) per liter in the month of May, according to a survey by the country’s Department of Energy Policy and Planning.

India

Two rounds of fuel tax reduction have already been adopted in India since the end of last year. In November 2021, the government announced a reduction of 5 rupees (R$ 0, 548 ) in federal taxes on gasoline and rupees (BRL 0,318 ) in diesel taxes . At least ten states ruled by allies of Prime Minister Narendra Modi of the Bharatiya Janata Party (BJP) also cut local rates at the time.

More recently, last month, India’s finance minister , Nirmala Sitharaman, announced, via Twitter, a new tax reduction of 8 rupees (BRL 0,318 ) per liter of gasoline, and 6 rupees (BRL 0,318 ) per liter of diesel, which came into effect on the day 11 of that month. According to her, the measure will cost 1 trillion rupees (BRL 180 ,3 billion) per year to the government.

“I want to urge all state governments, especially states where no reduction was made in the last round (November 2021) to also adopt a similar cut and give relief to the common man”, wrote the minister.

In addition, a subsidy of 400 was created. rupees (BRL 180 ,20) for the purchase of gas from kitchen, with a limit of 02 cylinders for each of the 909 million beneficiary s of an assistance program for women living below the poverty line. The aid must imply public expenditure by others 61 billion rupees (R$4 billion), according to Sitharaman.

This Thursday (19), the average price of gasoline was 92,64 rupees (BRL 6,180 ) per liter in New Delhi. The value of diesel was 87,60 rupees (BRL 5,92), according to survey of the India Times newspaper. The prices reached, respectively, 111,26 rupees (BRL 7,111 ) and 111,21 rupees (BRL 7,189 ) in Mumbai, 1,400 km from the capital.

Mexico

In Mexico, the government of Andrés Manuel López Obrador since the beginning of the year has kept the rate of the Special Tax on Production and Services (IEPS) levied on fuels at zero. “All year we have it guaranteed. We don’t have a problem because the balance sheet allows us to keep gasoline without an increase, diesel without an increase. I tell the people of Mexico that they will not increase these prices, not even electricity prices”, the president said at a press conference last week.

The government has also sought to promote domestic production of fuels, with the restoration of six refineries and an investment of 30 billion pesos (R$ 9,197 billion) in an attempt to double crude oil processing.

According to the Regulatory Commission for Energy in the country, the average price of regular gasoline in Mexican territory is 12,546 weights (R $ 5,57) per litre, while the same volume of premium gasoline is sold for 16,195 pesos (R$ 6,

). Diesel costs, on average, 19,29 pesos (R$ 6,548 ) per litre. The values ​​vary according to the federative entity.

Other countries

In general, the measures adopted by other economies around the world are not far from these models. European countries turned their efforts mainly to contain the rise in the price of electricity, heavily dependent on gas supplied by Russia.

Taxes on fuel were also cut in Ireland, Romania and Sweden. Countries like Hungary and Croatia established temporary price freezes.

Italy, Spain and Finland created additional taxes on extraordinary profits of energy companies, whose results were positively impacted by gas inflation. Italians also received aid to alleviate the effects of higher spending on electricity and fuel, while Spaniards saw VAT on energy fall by 17% for % and the tax on generation, from 7% to 0.5%.

There were cuts in energy taxes still in Belgium, Poland, Norway and the Netherlands. In France, the government, which had already announced a payment of 100 euros (R$ 546,63) to 5.8 million households and reduced electricity taxes, capped price increases by state-owned Électricité de France (EDF) to 4% for one year, at a cost of €8.4 billion euros (R$ 38,92 billion ).

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