ICMS puts pressure on fuel prices again – 03/16/2023 – Market

With the end of the reference price freeze and the increase in rates in some states, the ICMS is once again putting pressure on fuel prices in the country, contributing to the surge in gasoline at pumps in the last week.

The scenario also affects the price of diesel. In Minas Gerais, carriers even threatened a stoppage in protest against the high tax on fuel.

State taxes had been frozen in October 2021 during the rise in fuel prices after the end of the most critical period of the pandemic, but were changed again by state governments in 2023, with changes in the reference price used to calculate the tax .

Known as PMPF (final weighted average price), this value is revised every 15 days or every month, depending on the state. The rates defined by the state governments for each fuel apply to it.

In the case of gasoline, for example, 20 states and the Federal District raised the PMPF on February 1st, the same day that the federal government resumed charging PIS/Cofins on fuel. The highest rise was promoted by Ceará: R$ 0.15 per liter. Amapá and Maranhão are close behind, with R$ 0.14 per liter.

The increase in the PMPF contributed to the increase in the price of gasoline at the pumps more than the amount of the federal tax that was charged again this month. According to the ANP (National Agency for Petroleum, Gas and Biofuels), the average high was R$ 0.49 per liter, almost double the R$ 0.26 estimated by the market with the tax increase.

The states claim that the PMPF is calculated based on price surveys at service stations and, therefore, only update the final values ​​on which the rates apply.

The government of Maranhão, for example, says that Complementary Law No. 192 determined that ICMS collection should be based on the moving average of prices practiced over a period of 60 months and, therefore, it is not possible to speak of an increase in the tax.

“The small variations that occurred reflect the variations of the PMPF of the last 60 months that expire in each month of calculation”, he said, in a note.

For critics of this model, it feeds back the increase in fuel at the pumps, as it leads to further increases in the pumps. To solve this problem, the Jair Bolsonaro government established rates in reais per liter, but the change ended up being restricted to diesel and cooking gas.

Experts warn that the pressure will increase with the entry into force, during the month of March, of new state ICMS rates, further increasing the pressure on the price of gasoline. There have already been announcements of increased standard rates by 13 states.

This Saturday (11), the government of Rio de Janeiro announced that it will also charge 2% to finance the state fund against poverty.

In the case of diesel, the increase in the PMPF is even less widespread across Brazil, since the price of fuel has been falling at the pumps.

But it has already generated protests from carriers at least in Minas Gerais. Sindtanque, which brings together companies that transport fuel, has been threatening to stop after the local government raised the PMPF for fuel from R$ 4.45 to R$ 6.07 per liter in early March.

“This rise of the PMPF in Minas, from one hour to another, represented a hard blow for transporters”, says the president of Sindtanque-MG, Irani Gomes. After a meeting with the state government this Monday (13), the union withdrew. “Strike is not good for anyone, it is always the last measure.”

The government of Minas Gerais says that the high reflects the end of charging on an average value of 60 months, which “did not reflect the reality of the pumps at retail stations”. The current PMPF was calculated based on surveys at posts between February 13th and 16th.

Fundamental for cargo transport in the country, diesel will also have a high tax burden in early April when the new ICMS collection model takes effect, with the rate in reais per liter and no longer a percentage of the final price.

Specialist in fuel taxation, consultant Dietmar Schupp calculates that the average rate in the country will be R$ 0.95 per liter, R$ 0.13 higher than the one in force in the first half of March.