“Discount in the price of vehicles will make diesel more expensive and harm the poor”, says economist

The Provisional Measure published by the federal government, last Tuesday (6), on the incentive program for the automotive industry and discounts on new vehicles, is a palliative that will only have an effect in the short term – because it will make freight more expensive, also generating food price inflation. The observation is made by Professor Renan Silva, an economist at Ibmec Brasília.

The specialist understands that this type of decision by the government is not recommended, because it only benefits one sector of the economy and those who will end up paying “the bill” are the people who depend on the price of diesel oil. According to the Ministry of Finance, the vehicle price discount program will be “funded” by an increase in the price of diesel by R$ 0.11 per liter, which will take place from next September.

“It is a palliative measure, which ends up favoring only one sector”, opined Renan Silva. “Economically, it is not highly recommended precisely because you have to create imbalances that affect the poorest population, by anticipating the fuel burden – since freight is more expensive and ends up reaching the price of food”, explained the expert.

Understand

The Minister of Finance, Fernando Haddad, informed that diesel will be charged again, gradually, starting in September this year, as a way of replacing the incentive of R$ 1.5 billion that will be allocated to the price discount program of new vehicles, announced by the government.

Of the BRL 0.35 in federal taxes that fuel was exempted from during the pandemic period, BRL 0.11 will be recomposed in September and the rest will be charged from January 2024 (by President Lula’s previous decision, these taxes would only return to diesel prices next year).

With this, the government’s economic team calculates that, by the end of 2023, it will be able to collect back, through the tax on diesel, the R$ 1.5 billion used to finance the tax incentive program that aims to lower the price of cars, buses and trucks.

“Justification”

Haddad argued that bringing it forward to September would be a good way to raise the money needed to fund the new program. “The gradual recomposition of taxes is also a way of controlling the impact of the increase in the price of diesel on inflation and should help the Central Bank in the task of lowering interest rates”, he assured.

“The re-encumbrance of BRL 0.35 per liter of diesel was scheduled for January (2024). We are going to bring R$ 0.11 for 90 days from now (September)”, said Haddad, during a press conference this week, alongside Geraldo Alckmin (PSB), current Vice President of the Republic and Minister of Development and Industry.

used

According to Anfavea (National Association of Motor Vehicle Manufacturers), the Brazilian industry currently sells 2.1 million new vehicles per year, a number well below the 3.8 million in 2013.

The program launched by the government aims to obtain discounts of up to R$ 8,000 for cars, buses and trucks that comply with environmental requirements. The lowest value of a zero kilometer car currently sold on the market this week is R$ 68,990.00.

According to the dealer Jeovane Fernandes, who deals with vehicle resale, indirectly the government’s action to lower the price of new vehicles should also influence the price of used cars of all brands: “Consumers need to be alert when changing their used vehicle in a new one, because naturally the dealerships will lower the price of the semi-new one”, he observed.