Bolsonaro Suggests Offsetting Oil Price Hike With ICMS Tax Reduction

RIO DE JANEIRO, BRAZIL – A sharper rise in the price of oil could be offset in the domestic market by reductions in the rate of the Tax on Circulation of Goods and Services (ICMS), suggested President Jair Bolsonaro.

On Friday, January 3rd, as a result of tensions between the United States and Iran, the Brent rose 3.55 percent and the barrel closed the day quoted at US$68.60.

The measure could be adopted as a means to minimize the impact of the increase in oil in the pocket of the population while, concurrently, not interfering in Petrobras’ policy of readjusting the price of fuel according to the oil fluctuations in the international market.

Bolsonaro discussed the issue with Augusto Heleno, minister of the Institutional Security Office (GSI) and Roberto Castello Branco, president of Petrobras. “We talked and we have a strategy on how to proceed. The fact that worries us the most is a potential increase in oil, currently of five percent. I also talked to the president of Petrobras. Similarly to what happened in Saudi Arabia after the drone attack, things returned to normal within a few days. We hope this happens now too,” he said.

According to the president, should the oil continue to rise in the next few days, “a measure” may be implemented. He stressed, however, that the goal is not to interfere, and suggested that the governors reduce the ICMS rates on fuels should this scenario be confirmed.

“I talked to the Minister of Mines and Energy Admiral Bento, the president of Petrobras and Economy Minister Paulo Guedes and we have a non-interference line. We monitor and seek solutions. We appeal to governors. Assuming there’s a 20 percent increase in the price of oil, this will increase the price of ICMS by 20 percent. Can’t some governors give in a little on that too? Because everybody loses. When it comes to fuel, our whole economy is affected,” he said.

Bolsonaro took the opportunity to point out that Petrobras is still recovering after difficult years during the management of previous governments. “Petrobras is recovering from what it has suffered in recent years, particularly during the Workers Party (PT) government. They almost sunk a state-owned company. It would be the first state-owned oil company to sink in the world, as far as I know. And it is recovering”, he declared.

The president ruled out the possibility of the government issuing a position on the US military attack. The president further said that he is in contact with American authorities, but did not go into details. “Of course I’ll talk. I won’t discuss details, this is a reserved conversation, and we are allies in many matters”, he said.

The president also said that his trip to Davos and India are confirmed, but that the repercussion of the death of the Iranian general Qassim Suleimani may affect the agenda of heads of state. “We don’t know to what extent it could impact not only my trip but those of all the heads of state to Davos on this issue. There is a retaliation threat from Iran and we are waiting. For now, it is maintained,” he said.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error