Brazil’s Senate President promises to tackle rising fuel prices

Senate President Rodrigo Pacheco said on Monday that he will muster efforts to pass a bill freezing fuel prices in the country, which went up 49 percent over the last 12 months. However, his push will only begin in February, when lawmakers return from their end-of-year holidays.

Mr. Pacheco’s move is a response to pressure from the lower house, with Speaker Arthur Lira accusing him of not doing enough to tame fuel prices at the pump. Mr. Pacheco chose Senator Jean Paul Prates as rapporteur, who has drafted a separate bill that would force Petrobras to change its pricing policy — pegged to international oil rates since 2016. Petrobras holds a de facto monopoly over oil refining, holding massive influence over the market.

The federal government, which controls Petrobras, is divided between its fiduciary responsibility to minority shareholders and the oil major’s role in the economy. President Jair Bolsonaro has blamed state governors for high taxes on fuels. The House passed a bill in October changing how state-level goods and services tax ICMS will be calculated on such products. 

Speaker Arthur Lira says the change could bring gasoline prices down by 8 percent, though states and municipalities are against the measure, claiming it will cost them BRL 24 million (USD 4.35 million) in revenue every year.Brazil’s Mines and Energy Minister Bento Albuquerque called for an antitrust investigation into Petrobras for possible “abusive” practices due to the state-controlled oil producer’s refining monopoly.

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