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Diesel Market Chain
(*) Statistical Annual 2006 - Source: ANP - www.anp.gov.br
Diesel Fuel
Here you will learn how the diesel fuel market operates in Brazil and how its prices are formed.
When filling up at the service station, the consumer is buying diesel fuel that may have been produced by Petrobras, other refining companies that set up in Brazil, private petrochemical plants, or even imported by a company authorized by the regulatory National Petroleum Agency (ANP).
Petrobras sells diesel fuel produced in its refineries to the various distribution companies operating in Brazil, which, in turn, resell to the thousands of gas stations. Distribution companies may also resell diesel fuel to retail resale carriers (RRCs), or directly to freight and passenger carriers, industrial plants and farms. The last group can also buy directly from the RRCs.
The price of diesel fuel sold by Petrobras is divided in two: value of the Petrobras product and taxation. The taxes are state (ICMS1 VAT) and federal (CIDE, PIS/Cofins-social contribution tax).
As you can see, the price of diesel fuel consists of different items, and any change in at least one of them will have an upward or downward influence on the pump price paid by the consumer. We point out that Petrobras has influence on only one portion in the final consumer price: the price at its refineries, without tax and distribution and resale margins (see pump price figure).
Concerning taxation, the ICMS1 VAT tax has already been altered in 2003 in some States. In the State of Minas Gerais, for example, VAT on diesel fuel dropped from 18% to 12% in January 2003.
About the tax parcel, it is important to explain that changes at the calculation base of the tax substitution of the ICMS1 VAT also directly impacts fuel prices. The weighted average fuel price (PMPF) for the end consumer in 19 States, for calculating the tax substitution ICMS, is updated every fortnight.
This market is regulated by ANP rules and Law 9478/97, which loosened up the monopoly once held by Petrobras and, since January 2002, released the producer's prices and diesel imports. Since then, there are situations where Petrobras does not participate in the market chain of the product, as in the case of diesel, which may be imported or produced by an agent other than Petrobras.
Gas station prices all over Brazil are monitored by ANP using weekly studies, the results of which can be consulted on the Agency site (http://www.anp.gov.br)(*).
Further information from sac@petrobras.com.br or 0800 78 9001.
(*) This link goes to an address outside the Petrobras system. Petrobras is not responsible for the content or policies/practices of privacy of the web sites that we indicate.
1 The ICMS Vat tax includes the portion referring to Tax Substitution, which is the amount collected by Petrobras referring to distribution company sales to service stations, and the latter to the end user.
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