With protests crippling highways nationwide, Brazil’s lower house of Congress voted on Wednesday to eliminate certain taxes on diesel.
The senate has yet to vote on tax cuts truckers say are needed before they will end protests that threaten grains exports, industrial output and fuel supply at airports and gasoline stations.
State-run oil company Petroleo Brasileiro SA on Wednesday announced a temporary 10% diesel price cut at the refinery but the head of a truckers group said that step was insufficient.
Jose da Fonseca Lopes, head of the group known as ABCAM, said in an interview with a local radio station that the Petrobras price cut was ineffective because it would only last 15 days, after which the company would resume setting domestic prices based on international oil prices.
Brazil’s lower house of Congress approved on Wednesday the main text of a bill eliminating the CIDE tax on diesel and cutting the PIS/Cofins tax on the fuel to zero.
The measure has yet to pass the senate.
Lopes said the protests would continue until the PIS/Cofins reduction, which impacts fuel prices more significantly than the CIDE, is officially published.
Lopes noted it would take several days for truckers to normalise cargo deliveries in the country when demonstrations come to an end.
“It will take a week or more to normalise deliveries. That is why the Petrobras’ attitude does not help us. When we return to work at full steam, the 15 days will have passed,” Lopes said.
Meanwhile Brazil’s top coffee exporter Cooxupe warned foreign clients yesterday about possible shipping delays due to the truckers nationwide protests, according to a company executive.
Cooxupe’s senior export manager Evelyse Lopes said the company has sent messages to foreign clients saying it is not receiving empty containers at its warehouses to load coffee.
Loaded containers are not being transported to ports, she added.
Cooxupe said shipping lines are warning that they could skip stops at Santos port, Latin America’s largest, if truckers protests continue.
Brazil is a key global supplier of grains, meat, coffee and sugar, most of which reach ports by road.
Concerns that the protest could halt shipments of Brazil’s record soy crop have contributed to the steepest rally in soy futures in 10 months in Chicago trading, with prices up 4.5% in four consecutive days of increases.
Oilseed trade group Abiove said some soybean crushers were suspending operations due to the protest.
Sugarcane industry group Unica said certain mills had reduced harvesting work due to short fuel supplies.
Meat processor Marfrig Global Foods SA said on Wednesday some of its plants are reducing or suspending output due to lack of deliveries during the protest.
