The truckers’ strike exposed contradictions and a blatant lack of understanding on key issues affecting the fuel market. It is essential that Petrobras continue to pursue a policy that aligns the prices of oil products at refineries to the international market benchmark. This should be the case if we believe that the market is the most efficient system of resource allocation. Maintaining this policy is essential if investments are to be attracted, without which we risk shortages as the economy grows again. It is also necessary to implement the project of partial disposal of the refining park, now practically all controlled by the state, and to attract additional investments paralyzed for decades. There will be no one investing in the production of fuel in general with controlled prices below the market benchmark. The fact that refinery capacity is being temporarily underutilized in favor of imports reflects only one cyclical condition.
On the other hand, the truck drivers’ longing for predictability, or greater price stability, became evident. The motivation of the strike was centered on the recent transfer to the price of diesel of the observed increases in the price of oil and its derivatives in the foreign market, boosted by the devaluation of the real. The predictability in this case is relevant so that the negotiation of freights is not separated from the main cost of operation, which is the fuel. The discomfort and the strike came from the insecurity of not being able to pass back to frete the frequent increases in the price of the fuel. In this sense, the strikers had the support of several segments of the population equally affected by adjustments in the prices of gasoline and LPG.
The question is, therefore, how to reconcile these contradictory needs and desires. In the sea of confusion that has arisen, we witness the repetition of the proverb where bread is missing, everyone shouts, and no one is right. The fact that we are in the majority election year has raised the discussion a few decibels above.
The solution of this imbroglio is at hand, one only needs to understand and administer it correctly. The CIDE (contribution of intervention on the economic domain applied to the fuels) was conceived to be a compensatory tribute. That is, it should serve as a buffer attenuating the price variations of derivatives in the free market to consumers. The price policy should focus on the sum of the reference price at the refinery plus CIDE. Unfortunately, since its inception in 2001, CIDE has never been managed in the way it was designed to be a price regulating tribute. In the initial period of its application was maintained with a purely collecting objective, and during the Dilma government administered in a populist way aiming to keep the consumer price artificially low due to electoral motivation. Since then, CIDE has been maintained at a very low level, of 10 cents per liter in gasoline and 5 cents per liter of diesel. And it is for this reason that in the initial days of the strike, when it was decided to zero the CIDE, it was discovered that this measure would have a very small impact on the final price. Hence the need to also reduce the PIS and COFINS on diesel to meet the truck drivers’ longing.
If CIDE had been administered the way it was conceived, when the price of derivatives fell between 2015 and 2018 it would have absorbed some of the fall by creating a mattress to mitigate the impact of recent increases in oil and oil products. As there was no such mattress, there was wear and tear until a larger set of taxes were reduced.
Instead of forceps, after a strenuous strike with impacts suffered by the population at various levels, the solution would have been automatic and traumatic if we were, as a society, administering CIDE as compensatory tribute and market regulator.
Price stability at the pumps and price regulation fiscal policy is not an international unanimity. In many countries, consumers are exposed to market price fluctuations, more or less. The lesson learned from the strike is that a large portion of truckers and society want greater stability in the prices observed at the pumps. However, this objective has to be achieved without stifling Petrobras and other market players with a populist and artificial price policy – without fundamental investments being compromised so that fuels remain available to those same consumers and society. Otherwise, we run the risk of shortages generated not by a strike, but by pure inability of the market to meet price artificialities.
*Plinio NastariIt is Civil Society representative at CNPE, National Energy Policy Council and President of DATAGRO Consultoria
This text was translated by machine from Brazilian Portuguese.