Change of president of Petrobras will be innocuous to control prices; read analysis – Economy

RIO- Despite the criticism of the company’s Petrobras already made by the President of the Republic, Jair Bolsonaro, the federal government is among the biggest beneficiaries of the oil company’s financial results. This Monday, the 20th, the Unity will receive an additional installment of BRL 8.8 billionof state profit. The figure is part of a total, already announced this year, of BRL 32 billion in dividends which will be paid until July to the government, the company’s largest shareholder.

Between 2019 and 2021, the Union had already pocketed other dividends BRL 34.4 billionat updated values, according to a survey of Einar Rivero, from TC/Economática. When taxes and royalties are added to the profit destined for the Union, Petrobras injected federal coffers R$ 447 billion from 2019, beginning of the Bolsonaro government, to March this yearaccording to data from the company’s tax reports, revealed by the Estadão in May. Considering states and municipalities, the amount reaches BRL 675 billion. The amount paid to the Union alone corresponds to approximately five times the Auxílio Brasil budget planned for this year, around BRL 89 billion.

Since the beginning of the year, to counter the criticisms of Bolsonaro and leaders of the National Congress, Petrobras has been emphasizing that its gains return to society. The company reported that, in 2021, it collected BRL 203 billion in taxes and retained, the highest annual amount ever paid by the company, an increase of 70% compared to 2020. In the first quarter of 2022, paid over R$ 70 billion to the public coffers between profit, taxes and government participation, “practically double the amount collected in the same period in 2021”.

Problem or solution?

Faced with the numbers, economists with a more liberal or orthodox background tend to defend the use of extra revenue for the government, with the state-owned company’s profit as a source to finance policies that mitigate the effects of fuel prices, especially on the poorest. In this logic, holding prices, leaving the account in the state’s cashier, is inefficient, as it affects all companies in the sector and all consumers benefit, from the poorest to the richest. Therefore, it would be more efficient to direct resources, via Treasureonly for the poorest, without affecting the market.

to the consultant Raul Velloso, the criticisms of politicians, including Bolsonaro, have to do with the effects of high prices on voter behavior. “The best thing would be to do something through public resources. The money (from the profit) comes to the owner, the main shareholder is the government, and he uses this, in some way, to solve this problem for voters,” Velloso said, citing an additional Auxílio Brasil for the poorest as a measure. to mitigate, for example, the inflation of the gas cylinder. “Poor mothers who can’t cook can’t be in any doubt that they need to be helped. The profit comes from that”, he added.

There is practically a worldwide consensus on the need to make use of policies to mitigate the effects of fuel inflation, a shock boosted by the invasion of Ukraine by Russia, which occurred when the imbalances caused by the pandemic had not yet dissipated. O UK adopted an extraordinary tax on the profits of oil companies. O US President Joe Bidenalso puts pressure on oil companies.

Criticism of Biden

“Don’t blame the oil companies for their high profits. It’s not about scorching prices, it’s just how markets work. But there is nothing wrong with taxing these exceptional profits.” Olivier Blanchard, Former Chief Economist of the International Monetary Fund (IMF)in your account at twitter on Friday, the same day Biden blamed it, in an interview with Associated Press, the advance of gasoline prices by economic pessimism in the US. It was also the same day that Petrobras announced a readjustment in the prices of diesel and gives Gasoline.

In the most orthodox view, measures financed with public resources, increased by the payment of dividends from state oil companies or extraordinary taxes on the profits of these companies, are better than controlling the prices charged by companies. For Eduardo Costa Pintoresearcher at the Institute of Strategic Petroleum Studies (INEEP)linked to Single Federation of Oil Workers (FUP)the choice is not simple.

teacher of UFRJ Institute of Economics, he said that Petrobras could define a new pricing policy, with technical market criteria, uncoupled from international costs. In the expert’s accounts, if Petrobras had practiced 20% lower prices in 2021, the state-owned company’s net profit would fall from R$106.6 billion recorded to R$46.8 billion, already considering how much the company would lose by taking responsibility for all fuel imports from the national market. Profit would fall, but the company would still offer shareholder returns.

“The current policy is not based on market prices, but on maximum prices”, stated Pinto, adding that this is the result of the combination of the international parity policy with the monopoly position in the domestic market.

For the UFRJ professor, the discussion should start with a reflection on what to do with the increase in oil income, given the evolution of production in the pre-salt layer.

Petrobras has reduced its debt, is investing only in the most profitable projects, while revenue from oil extracted from the pre-salt is growing, at an increasingly lower cost of production. O Brazil became a net exporter of oil and the sector’s income benefits when international prices rise. Pinto’s calculations, based on Petrobras’ current five-year plan, suggest that this increase in oil income will translate into a net profit of R$400 billion over the next five years. “The discussion is: how are we going to use oil revenue?” asked Pinto.

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