Happy Friday! Today, fuel prices continues to perturb the government. Fewer younger children staying in school during the pandemic. Brazil’s river beach paradise dirtied by mining degradation.
Government tries again to reduce fuel prices
The Jair Bolsonaro administration has launched a new effort to curb fuel prices at the pump, which are up 49 percent over the past 12 months. Two solutions, neither exactly new, are being studied: (1) scrapping all federal taxes on fuels, and (2) creating a price stabilization fund.
Why it matters. Fuel inflation erodes families’ purchasing power, especially outside of metropolitan areas, where people rely more on individual transportation. The pinch is even stronger when we consider that average revenues in 2021 dropped to the lowest level in eight years.
Election. Mr. Bolsonaro’s move clearly eyes the presidential election. Over the past few months, he has tried to scapegoat state governors for the rising prices at the pump.
- State administrations were cornered into freezing ICMS goods and services tax on fuels to respond to the president’s attacks. But the continuing rise of fuel prices has vindicated them, and many have decided not to extend tax freezes beyond January.
- The administration also tried to accuse...