Fuel Operator threatens price freedom and empties ANP

The creation of a National Fuel Distribution System Operator, announced by the Minister of Mines and Energy, Alexandre Silveira, raises concern about the possibility of government intervention in prices in the sector.

At an event bringing together leaders from the production chain, at the beginning of the month, Silveira highlighted that the role of the new body will be to ensure that changes in prices are, in fact, “passed on to the final consumer”. He warned that he will forward a proposal to Congress to create the new body.

After the negative repercussion, the speech was minimized, classified as a specific government concern for specific cases. Uncertainties, however, persist.

In the perception of experts interviewed by the People’s Gazette, the purpose and functions of the new operator are not clear. There is also a redundancy of duties between the new body and the National Agency for Petroleum, Natural Gas and Biofuels (ANP), responsible for monitoring and regulating this sector.

“Strictly speaking, it is up to the ANP, as established by the Petroleum Law [Lei 9.478/1997]pay attention to consumer protection, in relation to prices, quality and supply of products”, says Bernardo Pedreti, coordinating lawyer of the Regulatory area at BRZ Advogados.

Diogo Lisbona Romeiro, researcher at the Center for Studies in Regulation and Infrastructure at Fundação Getúlio Vargas (FGV Ceri), highlights the monitoring already carried out, in addition to the ANP, by the Administrative Council for Economic Defense (Cade), which plays a decisive role in defending competition in the sector.

The analogy made by Silveira to the functioning of the body along the same lines as the National Electric System Operator (ONS) was also rejected by experts. The electricity sector, although monopolistic, is subject to tariff supervision.

“Price control is typical of the constitutional legal regime of the public service, which has low tariffs as a priority”, says Pedetri. This is not the case in the fuel sector, where free competition prevails. “Some basic concepts of regulation are being confused,” she says.

In Lisbona’s understanding, fuel prices are already monitored by the ANP, but are free. “A system operator at this moment raises an alert at a border regarding necessary monitoring or possible gaps for intervention”, he assesses.

Instituto Combustível Legal believes that the focus is on integration of control bodies

Emerson Kapaz, president of the Instituto Combustível Legal (ICL), who had initially expressed concern about price controls, told People’s Gazette that the issue has been resolved.

“We were very scared by the minister’s initial statement. But we had a meeting at the Ministry of Mines and Energy and the executive secretary [Efraim Cruz] assured us, the main actors in the sector, that there will be no price controls”, said Kapaz. The meeting was attended by the main actors in the industry. The ANP was not represented.

In Kapaz’s assessment, the body will be able to carry out specific inspections, in specific places, where there may be known price combinations between a few private distributors, which would characterize a cartel. “But everyone knows that controlling prices at 43,000 gas stations in the country is impossible,” he says.

The new operator, highlights Kapaz, came from the government’s need to seek technology and private efficiency to increase integration between control bodies in combating adulteration and tax evasion, smuggling and piracy throughout the production chain.

“We noticed integration failure. The Federal Revenue Service does not speak to the ANP, which does not speak to Serpro [serviço de processamento de dados do governo federal], which does not speak to the Highway Police, which could control the flow of trucks. There’s a lot of information floating around and no one can pull it off”, he explains.

According to Kapaz, the operator’s idea has been in development for four months, under the coordination of the Ministries of Finance and Mines and Energy.

“We held a meeting with the government, even at the time of the [Gabriel] Gallipolo [ex-secretário executivo do Ministério da Fazenda] and this was all under study, until Minister Silveira’s statement about prices”, says the president of ICL.

In Kapaz’s opinion, this is not an emptying of the ANP’s powers. As a private observatory, ICL began mapping data at a fuel monitoring center, passing on information to the government and the ANP itself.

“The issue is that the ANP cannot handle everything. We were the ones who provided information about the necessary control of methanol, we alerted the agency about the lack of fuel in the North Region. We pulled the data from the ANP’s own website, which it did not can compile. We want to provide support to strengthen the ANP”, argues Kapaz.

The solution is not to centralize, but to intensify existing mechanisms

The ICL president’s arguments were considered “strange” by regulatory market experts. “It is necessary to look with reticence at a movement that does not seem to be an evolution for the market”, believes Lisbona.

The idea of ​​integrating control bodies is also questioned. “It points to a more centralized vision, which is not part of the market architecture. That’s not the case”, says the researcher. He believes that, if there is a legitimate concern about prices, supply or tax evasion, the most appropriate solution would be to intensify existing control mechanisms.

“There is already a robust legal regulatory apparatus, which can always be improved, but it is efficient and consolidated”, he states.

In this context, Pedreti assesses, the ANP is one of the most important regulatory agencies, recognized for its technical capacity and qualified staff. “The concern must be that it has enough hands to carry out its institutional mission,” he says.

PT never “swallowed” the autonomy of regulatory agencies

Created in the United States at the beginning of the 20th century, as a way of compensating for market failures, regulatory agencies arrived in Brazil in the 1990s, during the government of former president Fernando Henrique Cardoso, who promoted the transition from the business state to the regulatory state. .

From the beginning, the idea of ​​regulatory agencies displeased national or physiological leaders, due to the functional, decision-making, administrative and financial autonomy of these bodies. The objective was to transfer market regulation, including public services, to private companies, taking into account consumer interests.

The PT never tolerated the existence of the agencies, nor the autonomy granted to them. Interested in total control of economic activity, the PT administrations were marked by attempts at political and partisan rigging of the agencies, budgetary suffocation and prolonged vacancies on the boards. In 2019, in the wake of Lava Jato and the State Law, Congress approved legislation to shield them from distortion.

In this third term of Lula, the attacks continued. In an attempt to weaken the agencies, on the first day of his administration, President Luiz Inácio Lula da Silva signed a provisional measure dismembering the National Water Agency (ANA) and transferring its function of regulating basic sanitation to the Ministry of Cities.

The maneuver was irregular, since the ANA’s competence can only be changed by law, as provided for in the Sanitation Framework – which the PT has always opposed.

Encouraged by the initiative, Congress also tried to do its part in the emptying. Representative Danilo Forte (União Brasil-CE) presented an amendment that would represent the end of the autonomy of the agencies, which would become subordinate to ministries.

Normative acts would be carried out by “councils”, a practice praised by PT governments. In practice, the choice and maintenance of advisors would be the responsibility of the government and its political allies, compromising the regulation of the sector through impartial management guided by technical criteria.

The initiatives were not successful, but they show the government’s willingness and hostility to the agencies, which represent an institutional barrier to partisanship, patrimonialism and corporatism.

“The model of regulatory agencies has proven over time to be advantageous to the public interest in independence and autonomy, less subject to political interference. Directors have mandates, quarantine to assume and rules that protect them from occasional political interests”, says Pedreti.

“It would be a setback at this point, in a transverse way, to weaken the legitimate system. If the idea is to resume the ANP’s legal attributions, the creation of the operator sets a dangerous and negative precedent for other regulated sectors”, he adds.

Wanted by People’s Gazettethe ANP informed that it would not comment on the case.