The Ministry of Mines and Energy (MME) released last night (18) a new expectation of reduction in the price of hydrated ethanol. According to the ministry, the expectation is that, after the enactment of the Proposal for Amendment to the Constitution (PEC) 15/2022there is an average potential reduction in the price of fuel, which should reach R$ 0.19 per liter. Enacted on Thursday (14)the PEC recognizes the state of emergency to expand the payment of social benefits and tax incentives until the end of the year, especially for producers and distributors of hydrous ethanol.
Among other points, the amendment amends the constitution to determine the maintenance of a “favored tax regime for biofuels intended for final consumption”.
“With the measure, the tax rate differential of the consumer price of hydrated ethanol in relation to that of commercialized gasoline is preserved, resulting in an increase in the competitiveness of biofuel”, explains the ministry.
The ministry also said that the estimate does not consider the possibility of reducing the price of biofuel to states that grant tax credits from the Tax on Circulation of Goods and Services (ICMS).
The constitutional amendment also authorized the Union to transfer up to R$3.8 billion, through tax credits, to states that reduce the tax burden on ethanol for producers and distributors of the product. In the evaluation of the MME, if the measure is applied, it could take the average price of a liter of hydrated ethanol to up to R$ 4.04.
