ICMS increase triggers gasoline, diesel and cooking gas prices in Brazil

ICMS increase triggers gasoline, diesel and cooking gas prices in Brazil
ICMS increase triggers gasoline, diesel and cooking gas prices in Brazil
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Since last Thursday, February 1st, drivers and homeowners have been facing higher costs for fueling their cars and using domestic cooking gas. This increase in prices is due to the increase in the Tax on the Circulation of Goods and Services (ICMS), a state tax that had a significant increase.

These changes are a consequence of the actions of several states that, seeking to compensate for revenue losses, chose to readjust the ICMS value for different products. In many cases, the general tax rate, which was previously 18%, increased to 20%.

Fuels follow a different taxation system

Fuels, however, follow a different taxation system, meaning their adjustments are in fixed amounts of cents. This increase was approved by the National Finance Policy Council (Confaz) in October, which is made up of state finance secretaries.

With the new charging method, ICMS was readjusted

This is the first time that the ICMS has been readjusted since the change in the charging method. In the new format, approved by former president Jair Bolsonaro in March 2022, the fixed amount of tax is charged per liter, in the case of gasoline and diesel, or per kilogram, in the case of cooking gas. In the previous case, each state could apply a different percentage to the total price of products.

Consequences on the prices of gasoline, alcohol, diesel and cooking gas

According to the change, the prices of various tax rates vary as follows:

1. Gasoline: will go from R$1.22 to R$1.37 per liter;
2. Diesel: will increase from R$0.9456 to R$1.06 per liter;
3. Cooking gas: will increase from R$1.2571 to R$1.41 per kilo.

Consumer prices will be significantly affected. As calculated by the National Oil, Gas and Biofuels Agency (ANP), a liter of gasoline will cost an average of R$5.71. In the case of diesel, the average value will reach more than R$6 for S-10 diesel, which has a lower lead content.

Finally, cooking gas, an essential item in Brazilian homes, will have an average value per 13-kilo cylinder of R$103.60, an increase compared to the current average of R$100.98. Therefore, it is necessary for Brazilians to carry out financial planning to deal with changes in the prices of gasoline, diesel and cooking gas starting this month.


The article is in Portuguese

Tags: ICMS increase triggers gasoline diesel cooking gas prices Brazil

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