Gas inflation exceeds 20% in 12 months and puts pressure on families and merchants

Gas inflation exceeds 20% in 12 months and puts pressure on families and merchants

The rise in cooking gas is already more than double the general inflation and topping the list of housing expenditures in the past 12 months. Pipe gas rose 26.29% and bottled gas 21.82%. The inflation rate for this period was 10.07%.

The price of gas depends on factors such as the international price of oil, federal and state interest rates, and distributors’ profits. According to Carla Beni Menezes de Aguiar, Professor of Economics at the MBA at FGV (Fundação Getulio Vargas), international price was the most important factor for cooking gas inflation.

Although Petrobras produces most of the gas consumed in Brazil, the Brazilian government has an import parity policy for all fuels. Based on this policy, the price of fuel in Brazil, including gas, begins to follow the international value of oil.

According to Sergio Bandera de Mello, president of Sindigás (Consortium of LPG Distribution Companies), the prices of other fuels also affect gas, due to distribution expenses. In the past 12 months, gasoline registered a cumulative increase of 5.64% and diesel 61.98%.

Consumers have felt the effect of these increases. Luis Antonio Ramos, 56, owns a cafeteria in Pirassununga, in the interior of São Paulo. He consumes about 12 cylinders of gas per month and says that since the beginning of 2021, spending has nearly doubled.

In October last year, he turned the month around with a negative balance and had to pass on the gas price increase to customers.

Maria Lenes, 42, a lunchbox owner in Leme, in the interior of São Paulo, has had to make adjustments in her work. She said that she did not pass the price to the warm so as not to lose customers, but the profit margin has fallen a lot.

Due to the lower prices, the number of customers increased, but they had to stop selling lunch boxes at night, when the demand was lower.

Traders also noted the impact of gas prices on household spending. The solution that Louise found was to look for promotions at the supermarket to balance the budget. “If you can save R$60 on the purchase, that really helps cover the increase in gas.”

According to the FGV economist, it is difficult to say what will happen in the coming months. The international scenario is a deflation scenario, and if this trend continues, the price of gas in Brazil will also tend to decline.

On the national stage, she says, there is not much that can be done in the short term. In recent months, both the federal and state governments have announced ICMS fuel rate cuts, but the start of the election period prevents further cuts.

Cooking with an air fryer or a gas stove?

Despite the increase in gas prices and the decline in electric power, data from Sindigás indicates that the stove is still more economical than electric tools. According to the union, even in times of low electricity prices, replacing a gas stove with an air fryer can be up to 79% more expensive to cook rice. At peak times, this difference can be more than 300%.

Aguiar offers tips on how to save on a gas stove:

  • Give preference to a pressure cooker, which cooks food more quickly than a traditional cooker

  • When using the oven, avoid opening the door to check food.

  • Plan your meals – cooking just once for a few days can drastically reduce your gas bill

  • Keep the stove clean: When stove tops are clogged or greasy, the time needed to cook increases and this can interfere with gas expenditures – yellow or orange flames can indicate that the stove needs maintenance

Impact on the pockets of the poorest

For the economist, the poor are hardest hit by this increase. In some states, a gas cylinder is worth 10 percent of minimum wage, the highest since 2007, he says.

A study issued by binding It showed in April that gas consumes up to 22% of the budget of basic services for the poor, while for the richest, this figure is as high as 13%.

Since the beginning of the year, the government has paid Valley Gas to the poorest families. In August, the value was R$110.

Families can have Gas Valley:

  • Beneficiaries of Auxílio Brasil or BPC (Benefício de Prestação Continuada) whose data has been updated in CadÚnico

  • Families with a monthly income per family member less than or equal to half the minimum wage, R$ 606 this year

Women heads of household or victims of domestic violence are given priority for assistance.

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