The place does the worth of gasoline go?

Fuel prices started to fall in June, after skyrocketing since mid-2021. But what to expect for the next few months?

The price of gasoline started to skyrocket in the middle of last year – and only recently began to show signs of relief to consumers’ pockets.

But where is the price of fuel going now?

Why are prices falling?

While the rise was driven by the resumption of the global economy after the fall caused by the Covid pandemic, combined with the strong rise of the dollar against the real and the effects of the war in Ukraine, the recent drop came mainly in the wake of the cut in taxation on the product.

In mid-June, legislation came into force that limits the rates of the Tax on the Circulation of Goods and Products (ICMS) that are levied on items considered essential – such as fuelsnatural gas, electricity, communications and public transport.

ICMS is a state tax, makes up the price of most products sold in the country and is responsible for most of the taxes collected by the states.

The same law also zeroed the rates of federal taxes levied on gasoline – which, in June, represented around 10% of the price of fuel sold to consumers, according to Petrobras data.

How are the prices today?

The entry into force of the new law took effect quickly: in the same month, the price of gasoline sold to consumers dropped 0.72%. And, in July, the fall was 15.48%, according to data from the Brazilian Institute of Geography and Statistics (IBGE).

In the 12-month period, after 16 consecutive months with a high in the digits, gasoline finally returned to a discreet rise last month, of 5.64%.

The liter of gasoline, which was sold in the first half, on average, at R$ 7.39 (although in some places it exceeded R$ 10) – it dropped to R$ 5.74 at the end of July. The fall in international oil prices also contributes to this – in dollars, the fall has already reached about 20%.

An attempt to attack the systems of the National Petroleum Agency (ANP), which carries out this price survey, however, left more recent data unavailable. The expectation is that, when the disclosure is resumed, the survey will show another drop – since Petrobras once again, on Tuesday (16), reduced the price of gasoline sold to distributors, following a relief in international oil prices .

And how is it going forward?

The expectation is that the price of a liter of gasoline will stabilize – or even continue to fall for some time.

“Our perspective is that there will be no further increases in the price of gasoline this year”, says the analysis leader at Warren Investimentos, Frederico Nobre. “It is possible that gasoline will remain at current levels or even drop a little more in the course of 2022”, he adds.

“Everything will depend on the pace of the world economy”, points out André Braz, economist and price index coordinator at Fundação Getulio Vargas (FGV).

Braz explains that the world is still experiencing a period of high inflation, which should make the central banks of the main economies continue to raise their interest rates to stop the rise in prices. This movement ‘cools’ the economy, and makes it difficult for commodities to rise – including oil.

“For these cheaper raw materials, including oil, the tendency is that prices do not rise as strongly or even fall”, says the economist.

He recalls that, if the international price drop trend continues, there are chances of further cuts in gasoline and diesel prices here.

The economist points out, however, that these expectations can be reversed, due to the elections scheduled for October, and by geopolitical conflicts, such as the war in Ukraine and the tension between the United States and China over Taiwan.

“So it will depend on exactly how the world behaves. But at that moment what I described [a estabilidade ou queda de preços] seems to be the trend, what we should have the highest probability of happening”, he points out.

A survey by XP estimates that gasoline has deflation, within the IPCA, of 8.28% in August, followed by another, much milder, in September (-0.67%). In the last quarter of the year, slight increases should make the price rise around 5%.

But the expectation of the financial institution is that, by the end of 2022, the liter will be selling about 15% cheaper than it was at the beginning of January. If this materializes, Brazilians can enter next year paying, on average, just over R$5.60 per liter of gasoline.

And in 2023?

This year’s relief, however, may be short-lived: that’s because, if there is no change, as of January, federal taxes will be levied on gasoline again – and put pressure on drivers’ pocketbooks.

“For 2023 is another conversation. I think we have to wait a little longer for us to get to the bottom of it. There is an election there in the middle of the way that can change the ICMS measure, the whole issue of the PEC of benefits, in short, so we prefer to wait and understand”, says Nobre, from Warren.

Source: G1