Gas price drops a little and puts pressure on low income – 06/06/2023 – Market

With great weight in the budget of low-income families, gas cylinders have been falling much less than other fuels since the records reached after the start of the war in Ukraine, which generated an inflationary escalation in the world.

Even with cuts by Petrobras, fuel became more expensive in six states. Survey of Sheet shows that the product consumes more than half of the income of poor families in some regions.

Between the record reached in March 2023 (R$ 159.58, in IPCA-adjusted value) and the R$ 104.37 verified last week, the average price of the 13-kilogram cylinder fell 12%, while gasoline and diesel plummeted 32% and 34%, respectively.

The prices of the three products have been reduced several times at refineries in recent months — gasoline still benefited from tax cuts — but data compiled by Ineep (Institute for Strategic Studies on Petroleum, Gas and Biofuels) indicate damming in the price of gas.

At Petrobras refineries, the sale value of fuel fell 47.9% from the peak of R$ 61.65 per cylinder reached in March 2022. There were five reductions in the period, the last of them on May 17, 21 .6%, or BRL 8.97 per cylinder.

When announcing the reduction, Petrobras said it expected the average price of the product to reach R$ 99.87. Two weeks later, according to the ANP (National Agency for Petroleum, Gas and Biofuels), the average sale price was R$ 104.37.

Before the cut, however, the product was pressured by the implementation of the new ICMS collection model, which now has a single national rate R$ 7.50 higher than the average amount charged by the states until April.

Survey of Sheet shows that the cost of the product can be equivalent to more than half of the budget of vulnerable families, included among the poorest 10% of the Brazilian population, in states such as Pará, Bahia, Piauí and Maranhão.

In other states, such as Ceará, Amazonas and Sergipe, the average price of a gas cylinder represents more than 40% of the income of the poorest 10%.

Among the capitals, fuel exceeds 20% of the budget of vulnerable families in Manaus (AM), Fortaleza (CE), Teresina (PI), Salvador (BA), São Luís (MA) and Belém (PA).

Ineep researcher Carla Ferreira points out that ANP indicators indicate that there was appropriation of the drop in refineries by distributors and resellers of cooking gas.

The most recent data from the agency, referring to January, show that fuel represented 40% of the final price of cylinders, while industry margins represented 48%. In March 2022, margins represented 37%, against 51% for the cost of gas.

“The reduction in refineries is not being passed on, which may mean that the sector is taking advantage of this moment to recover margins”, she says. In January 2020, before the pandemic, margins represented 43% of the final cost.

The sector says it does not comment on price developments. In a note distributed shortly after the announcement of Petrobras’ last reduction, the association that brings together resellers complained that distributors have not passed on all the cuts, “leaving resellers in a very uncomfortable situation”.

But he argued that prices are free in the country, “the segment can price products and services according to the operating costs of each company”.

Even with help for purchases by low-income families, sales of 13-kilogram cylinders have been shrinking in recent years, which the industry sees as a reflection of rising prices. In 2022, the drop was 2.6%. In the first quarter of 2023, from 1%.

To try to minimize the problem, the federal government pays a monthly allowance of R$ 52 per month to families registered in the Single Registry for social programs, which represents R$ 104 every two months, the estimated duration of a canister.

In April, the benefit was paid to 5.69 million families, at a cost of R$626.2 million. On June 1, the government published a decree extending the deadline for payment of the extra portion of the benefit, which previously guaranteed 50% of the value of the cylinder every two months.

The sector, however, questions the payment method, which is done without obligation to spend on the purchase of the product. “It’s a direct transfer of income, with no need for accountability by the beneficiary”, says Sindigás, which brings together the distributors, in material on the subject.

“Sindigás argues that the objective of public policy should focus on combating energy poverty, that is, improving the quality of life of families by reducing the use of firewood for cooking”, he says. “With the specific destination, the chances of success increase.”

The Ineep researcher also assesses that Petrobras has been giving more relevance to alternative fuels in its new commercial strategy, which abandoned the concept of import parity, and reduced gasoline and diesel prices.

“The two biggest bottlenecks are LPG [o nome técnico do gás de cozinha] and diesel: diesel, due to its importance in transportation; LPG, due to the importance it has in household consumption.”