Trucker strike: Bolsonaro eliminates federal diesel taxes, chastises head of Petrobras

RIO DE JANEIRO, BRAZIL – The president considered the readjustment announced by Petrobras yesterday as “out of bounds” and “excessive”.

After a new readjustment by Petrobras, President Jair Bolsonaro announced on Thursday, March 18th, that as of March 1st there will be no federal tax levied on the price of diesel oil. Bolsonaro considered the readjustment announced by Petrobras yesterday as “out of bounds” and “excessive”. He stressed that he could not interfere in the state-owned company, but emphasized that “there will be consequences.”

The federal taxes on diesel are the PIS, Cofins and Cide. On Thursday, Petrobras announced its fourth readjustment this year. Diesel oil will increase by 15.2% as of Friday, February 19th, and gasoline by 10.2%.

“As of March 1st there will be no federal tax on diesel for two months,” said Bolsonaro in his weekly live stream on Thursday, March 18th.

During the two months of federal tax exemption, Bolsonaro said that the government will be studying measures to eliminate federal taxes on diesel. “To help offset this excessive increase by Petrobras, in my opinion,” he said.

Despite not elaborating, the president also suggested that “something” would happen at Petrobras in the coming days. “I can’t and wouldn’t interfere (in Petrobras). But something will happen in Petrobras in the coming days, something must change, it will happen,” he said.

The reduction of the PIS/Cofins tax on diesel announced by Bolsonaro meets the demands of truckers, part of the president’s voting support base, whohave been pressuring the government because of the increase in the cost of fuel. In an indirect threat to the president of Petrobras, Roberto Castello Branco, the president mentioned that the head of the state-owned company even said he had “nothing to do with truckers.”

“As the president of Petrobras said, just a few days ago: ‘I have nothing to do with truckers. I raise the price here, I have nothing to do with truckers. That’s what he (Castello Branco) said, the president of Petrobras. There will obviously be consequences,” said Bolsonaro. Petrobras announced that it would not comment on the president’s remarks.

Joining the President in the live stream, Infrastructure Minister Tarcísio de Freitas said the cut in PIS/Cofins tax for two months is an “emergency measure” while the government analyzes ways to “counter diesel price volatility.”

Meanwhile, the government has forwarded a bill to Congress to establish a fixed national rate for the ICMS, a state value-added tax imposed on the sale of goods and services. “Our proposal is for the CONFAZ (National Council of Treasury Policy) to decide on the ICMS rate for each type of fuel. It is not interference from us, the CONFAZ will decide,” said Bolsonaro. He also suggested that the CONFAZ should set a maximum price for fuel in each state.

Cooking gas

Federal taxes on cooking gas will also be eliminated. The cut will be permanent, according to Bolsonaro. “This afternoon, I met with the economic team, headed by Minister Paulo Guedes; we decided that, as of March 1st, there will be no more federal taxes on cooking gas, permanently,” he said.

“The price of cooking gas is currently an average of R$90 a cylinder for consumers. And the price at the source is a little under R$40. So, if it is R$90, the R$50 represents the profit of middlemen and ICMS, a state tax,” he commented.