After a sharp fall in the first months of the pandemic, fuel prices at the pump have been rising since the middle of last year as economic activity resumed after the strictest period of social isolation to contain the spread of the coronavirus.
2021 began with gradual hikes in fuel prices straining consumers’ pockets.
Now, in 2022, the war in Ukraine and the sanctions imposed on Russia are causing the international price of oil to skyrocket.
But how do these prices come about?
Since Petrobras is dominant, the impact of the price of petrol and diesel starts with the company, but there is also the sale of private companies. Diesel suffers even more from the influence of oil weight in the composition.
In addition to taxes (ICMS, PIS/Pasep and Cofins and Cide), the difference between refinery prices and the consumer price is affected by manufacturers’ or importers’ profits, the cost of anhydrous ethanol (in the case of gasoline) and biodiesel (in the case of diesel) and distribution and dealer margins.
1 of 3 fuel marketing chain — Photo: Arte/G1
Fuel distribution chain — Photo: Arte/G1
Check out the prices for each below.
2 of 3 Diesel Price Breakdown — Photo: Arte g1
Breakdown of diesel prices — Photo: Arte g1
Diesel is Petrobras’ biggest influence on pricing. The company’s revenue share (share that Petrobras retains) of the price is 63.2%, more than half of what the consumer finds at the pump.
Taxes make up the second largest share at 11.7% of the price. With federal taxes (Cide, PIS and Cofins) currently set to zero, this disc today consists solely of ICMS, State.
The distribution chain and resellers keep 14.7% of the amount paid, the third largest part of the price.
Finally, there is the influence of biodiesel. According to Petrobras, a minimum admixture of 10.4% to mineral diesel is currently required by dealers. By 2023, this share should reach 15%.
3 of 3 Gasoline price composition — Photo: Arte g1
Gasoline price composition — Photo: Arte g1
The gasoline sold at gas stations is a mixture of gasoline and anhydrous ethanol. The split is 73% and 27% respectively. As with diesel, taxes and distribution and resale profits are added to the final price.
A large part of the price of gasoline consists of taxes. Taken together, ICMS, PIS/Pasep and Cofins account for 33.6% of the final amount, with the first accounting for 24.1% and the others for 9.5%. What remains for Petrobras (recovery) is 38.8% of the final price.
Anhydrous ethanol enters next this accounts for 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 on the international market since economic activity resumed, and the exchange rate of the dollar.
The coronavirus pandemic has required passenger movement to be restricted to stem the spread of Covid19. The price of oil fell at the most intense moment of social isolation and rose again as commercial activities opened up.
In addition to the increase in international oil prices, the rise in the dollar, the currency in which the commodity is quoted, is also making itself felt here. However, after ending 2021 on a sharp rise, the currency has racked up a nearly 10% drop this year despite the recent rally.