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    What makes up the price of gasoline? Most of the final value comes from taxes

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    Average price of regular gasoline rose 44.3% at stations in Brazil, says ANP (Image: REUTERS/Max Rossi/File Photo)

    On Thursday (20), the president Jair Bolsonaro announced to negotiate a PEC, proposed amendment, with Congress to reduce PIS-Cofins, a tax belonging to the federal constitution, which is levied on fuel.

    In 2021, the high fuel prices strongly affected the Brazilian pocket.

    A survey by the ANP (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis) showed that the average price of regular gasoline, for example, rose 44.3% at gas stations in the country.

    Furthermore, the rise in fuel prices was among the main factors responsible for the growth of inflation in Brazil, which ended the year with 10.06% increase, according to IBGE data.

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    But, after all, why does gasoline go up so much?

    THE Money Times explains the process of transforming oil into fuel and the composition of the price of gasoline, check it out.

    From oil to fuel

    The fuel production chain ranges from the extraction of oil to the supply of pumps at gas stations (Image: Reproduction / Petrobras)

    The fuels used in the daily life of Brazilians are the final product of a production chain, which ranges from the extraction of oil to the supply of pumps at gas stations.

    According to Petrobras, the process begins with the extraction of oil in waters up to 7 thousand meters deep.

    On the surface, industrial plants separate the oil and send it to the coast.

    Upon arriving at refineries, oil undergoes chemical and physical processes that purify and break down heavy molecules, giving rise to products such as gasoline, diesel oil and liquefied petroleum gas (LPG).

    After this process, the fuels are sold to distributors, who will resell them to consumers at distribution stations.

    What makes up the price of gasoline?

    Composition of the final price of gasoline — collection between December 26, 2021 and January 1, 2022 (Image: Reproduction/ Petrobras)

    In the last stage of production and distribution of fuels, the sale to distributors, the fuel that is purchased at the refineries is type “A” gasoline.

    In compliance with Brazilian legislation, the fuel sold at gas stations must be mixed with anhydrous ethanol. The mixture of 73% of gasoline and 27% of anhydrous forms gasoline “C”, which, finally, arrives in the tanks of the vehicles.

    In this way, still according to the oil company, the price that the consumer pays is the sum of the realization price of Petrobras itself, the dominant company in this market, the cost of ethanol (which is defined by the producers) and the costs and profits of the distributors. and service stations, as well as taxes (ICMS, PIS/Pasep and Cofins, and Cide).

    As the image above shows, taxes together add up to 44% of the final price of gasoline, the largest share of the value.

    Petrobras’ share is 29%. Anhydrous ethanol represents 15% of the value and the profit of distributors and service stations is 12%.

    Another factor that also impacts the price of gasoline is the value of international oil. With the commodity’s high on the foreign market and the dollar exchange rate, the final price of fuel also increases.

    Will fuels continue to rise in 2022?

    For Sergio Vale, chief economist at MB Associados, fuel prices tend to be between mildly high or flat this year.

    “The price of fuel will rise in 2022, but in a more moderate way. The price of gasoline should be between R$ 7 or R$ 8 per liter for the consumer in the year”, says Vale.

    Source From: Moneytimes

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