FUP and Ineep advocate for export tax on crude oil.

247 - The Unified Federation of Oil Workers (FUP) and the Institute for Strategic Studies of Oil, Natural Gas and Biofuels (Ineep) advocated for the implementation of a crude oil export tax.

"Market players have become accustomed to working in recent years under Petrobras' management as if the state-owned company belonged to them; it is majority-owned by the Union and, in that capacity, has the right to reassess the privatization process and defend the implementation of measures, such as the export tax on crude oil," stated the general coordinator of FUP, Deyvid Bacelar. 

"FUP supports the halt to asset sales because it considers the measure correct, and because it understands that the privatizations were carried out without transparency and in a hasty manner. The Federation is aligned with Ineep (Institute for Strategic Studies of Oil, Natural Gas and Biofuels) in defending the implementation of the crude oil export tax," it emphasized.

According to the technical director of Ineep, Mahatma dos Santos, taxes on crude oil exports are common tax instruments for countries that are net exporters of crude oil or refined petroleum products. These countries commonly use them to finance the maintenance of domestic prices at levels lower than those practiced in international markets.

“We have historical experience in this matter. The United States, for reasons of national security, prohibited the export of crude oil for many years. Russia's main economic policy instrument in the oil and gas sector is the taxation of crude oil exports. There are three pricing systems there: one for the European market, another for the Commonwealth of Independent States (CIS), and yet another for the domestic market. The first two, which are export prices, have higher values ​​and taxes to subsidize domestic prices in the Russian market. There is also the case of Argentina, which taxed exports of the product between 2006 and 2012,” he pointed out.

Based on international practices and Brazil's status as a net exporter of petroleum, Ineep considers the 9,2% tax rate, adopted for four months, on crude oil exports to be a positive decision, given the current context of high energy commodity prices worldwide. "The tax is not intended for revenue collection. It is primarily aimed at capturing a portion of the petroleum revenue generated by these oil exporters," says Santos. He also points out that, in the last two years, the increase in oil prices on the international market has directly contributed to the extraordinary growth in profits of oil companies, both those operating in Brazil and in the global market.

According to Bacelar, citing the United States International Energy Agency, in 2022 alone there was an increase of approximately US$2 trillion in profits earned by global oil companies compared to 2021, due to record oil and derivative prices registered last year. "This taxation measure makes sense because it is an option for taxing the extraordinary income generated in recent years and because it aims to compensate for revenue previously waived by the government and seeks to mitigate the impact on the Brazilian domestic market of the volatility of rising international prices of derivatives," reinforces Santos.

According to the general coordinator of FUP, the partial reintroduction of fuel taxes, offset by this rate, is a way for the State to demand a contribution from oil companies operating in Brazil to reduce the impact of these price increases on the most vulnerable population. He also refuted complaints that the export tax will generate legal uncertainty, affect competitiveness, or inhibit investment.

“Legal uncertainty is not defined solely by this element. It does not harm competitiveness because the tax rate applies to all players operating in the national market and, given that companies' profit margins were exceptional due to high prices, it is only fair to demand compensation to guarantee lower prices in the domestic market. Nor will it discourage investment, as strategic plans are defined, these are long-term decisions and, in principle, the taxation will be temporary, for four months,” highlighted the FUP leader.

Regarding the suspension of privatizations, lawyer Ângelo Remédio, from Garcez Advogados, representing FUP, highlights the lack of transparency in decrees number 9188, which regulates the sale of refineries, and 9355, which regulates the sale of oil fields—both created during the coup government of Michel Temer (MDB). One of the main objectives of the coup was to attack Petrobras, the economic engine of Brazil. “It is absolutely legitimate for the incoming government to request a halt to the process to analyze and understand how to proceed from there. Ninety days seems reasonable to verify if the new energy policy will maintain these privatizations,” he says.