The price of oil

Let's start with a hypothetical scenario: consider an honest businessman. To set the price of his product, he must add up all the costs involved in its production, including taxes. He will add a fair margin, and from that, he will arrive at the established price.

When circumstances allow, he may increase his margin slightly. However, when the company is a monopolist, as is the case with some pharmaceutical products, the price may be increased by an extra margin that could not be called honest, since it takes advantage of the buyer's weakness. This is the case with Petrobras today.

Setting prices using margins that are not included in production costs is dishonest. In this case, using the price of oil abroad cannot be decently justified, since the cost of producing domestic oil is much lower and we are fundamentally independent with current deepwater production. 

Brazil's imports of refined petroleum products are offset by exported oil, the costs of which have also increased. Under the current circumstances, there is an extra profit margin on the sale of refined petroleum products in Brazil. 

We will now use a principle of physics, namely, the principle of conservation of money. If someone makes an extra profit, someone else is losing. And in this case, it is the population that loses. 

Those who are profiting are Petrobras shareholders, the Federal Government, and State Governments through taxes. That's why they are reveling in the increase in petroleum derivatives in Brazil. That's why the President of the Republic and other elected officials look sad but don't change the pricing formula. That's why they are currently in the National Congress proposing unusual formulas to compensate for the excessive increase in derivatives. They don't realize that correcting one mistake with another never works, not even in the medium term.

The excuse that taxes benefit the people is weak. Perhaps they benefit the political parties in power and the mayors who profit from the ICMS (a Brazilian sales tax). No fool believes in any benefit to the population.

Under the pretense that we should use the international price of oil to impose market dictates, the neoliberal government is paying bills with the people's money.