How are gasoline and diesel prices formed? | Economy

After a sharp drop in the first months of the pandemic, fuel prices at the pump have risen since the middle of last year, as economic activities resumed after the strictest phase of social isolation against the spread of the coronavirus.

The year 2021 began with successive increases in fuel prices, weighing on consumers’ pockets.

Now, in 2022, the war in Ukraine and the sanctions imposed on Russia are causing the international price of oil to soar.

But how are these prices formed?

As Petrobras is dominant in the market, the influence of the price of gasoline and diesel starts with the company, but there is also the sale of private companies. Diesel suffers even more influence, due to the weight of oil in the composition.

In addition to taxes (ICMS, PIS/Pasep and Cofins, and Cide), the difference between refinery prices and the price charged to consumers is influenced by producer or importer profits, the cost of anhydrous ethanol (in the case of gasoline) and biodiesel (in the case of diesel) and distributor and dealer margins.

Fuel marketing chain — Photo: Arte/G1

See the pricing for each below.

Diesel price breakdown — Photo: Arte g1

Diesel has the greatest influence by Petrobras on price formation. The company’s share of realization (share that remains with Petrobras) in the price is 63.2%, more than half of what the consumer finds from the pump.

Taxes are the second largest share, with 11.7% of the price. With federal taxes (Cide, PIS and Cofins) currently zeroed, this slice today is all ICMS, state.

The distribution chain and resellers keep 14.7% of the amount paid, the third largest portion of the price.

Finally, there is also the influence of biodiesel. Currently, a minimum blend of 10.4% with mineral diesel is required by distributors, according to Petrobras. In 2023, this share should reach 15%.

Composition of the price of gasoline — Photo: Arte g1

Gasoline sold at gas stations is a mixture of gasoline and anhydrous ethanol. The split is 73% and 27%, respectively. Like diesel, taxes and distribution and resale profits are levied on the final price.

Much of the price of gasoline is made up of taxes. Added together, ICMS, PIS/Pasep and Cofins add up to 33.6% of the final amount, with 24.1% for the first and 9.5% for the others. What remains for Petrobras (the realization) is 38.8% of the final price.

Next, anhydrous ethanol enters – representing 13.2% of the final value. The profit of distributors and resellers is 14.3%.

The main pressure on fuel prices comes from international oil prices. There was a double action, the rise of the commodity in the international market since the resumption of economic activities and the dollar exchange rate.

The coronavirus pandemic demanded a restriction of the movement of people to contain the spread of Covid-19. The price of oil sank at the most intense moment of social isolation and came on a rise as commercial activities opened up.

In addition to the rise in international oil prices, the impact here is felt through the rise in the dollar, the currency in which the commodity is quoted. After closing 2021 with a strong rise, however, the currency has accumulated a drop of almost 10% this year – despite the spike in recent days.

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