Economy ‘It is difficult to serve more distant communities’; reflections of the increase in fuel prices in the Amazon

The increase in fuel is not just about price; the effects are also social. (Jeff Pachoud/ AFP)

Nauzila Campos – from Cenarium Magazine

MANAUS – “The worst of all is that the platforms do not adjust the value passed on to the driver. We are receiving the same thing as four years ago”, says the self-employed Gleyde Lima, registered at Uber and member of the Movement of Application Drivers Leadership in Manaus. The pressure on the category comes from the fuel pumps that keep showing higher prices periodically. Just in 2021, adding up all the accumulation of increases throughout the year, gasoline and diesel prices rose more than 44%, cooking gas, 33%, and CNG, 36%. The data are from the National Oil and Gas Agency (ANP).

In the Amazon, with its peculiarities among the states and the logistics that already make transportation and distribution more expensive, the impacts go beyond the weight on the pocket. As an application driver said at the beginning of the report, “every fuel increase directly affects our category, when gasoline increases, the others also increase: alcohol, GNV… today we had a 5% increase in GNV, we are in a lawless land. Our fleet consists of rented cars, people can’t afford to pay for the rental car, gas, having to take food home… And those who have their own car can’t afford the proper maintenance”, reported Gleyde, who doesn’t believe in the continuity of Uber in Manaus in the long term as much as before.

Social impacts

From the social point of view, two points of significant impact in the Amazon with the increase in fuel prices can be highlighted. Firstly, considering that the price increase has a chain reaction and makes all kinds of products more expensive, the basic food basket – which is already not cheap – also becomes more expensive and deepens the hunger problem among the poorest families in the Amazon. According to Natã Souza Lima, a social scientist and doctoral student in Social Anthropology at Ufam, “This will also weigh on products that are imported from other regions of the country, as well as on regional production. Small rural producers in the Amazon will face higher costs for the flow of goods. Together with the health crisis and the floods, this could weigh heavily on the countryside of the Amazon.

Another point that worries the scholars is the maintenance of social projects in the Amazon, so necessary during the pandemic period. In the countryside roads and riverside communities, the use of the boat is indispensable and the rivers are the roads. “Fuel is essential for access to the communities. Both the state and civil society organizations have travel costs to bring social agents, health agents, programs with education and training. In 2021, many organizations have suffered from the impact of gasoline increases on their budgets. With this, it becomes more difficult (because more expensive) to serve more distant communities in the Amazon”, says the scientist Natã.

Justifications – or not – for the increase

In a statement, Petrobras justified the increase as necessary to “ensure that the market continues to be supplied on an economic basis and without risks of shortages by the different players responsible for serving the various regions of Brazil: distributors, importers and other producers, in addition to Petrobras.

The Union of the Retail Trade of Petroleum Derivatives, Lubricants, Alcohols, and Natural Gas of the State of Amazonas (Sindicombustíveis) released a note regarding price practices at the local level. “The Union does not interfere in the fuel prices and administration of the gas stations, for this reason we can not inform the value of the adjustment that will be passed on to the final consumer”, removing any influence of owners of gas stations in the adjustment. The note goes on:

“We emphasize that the market is free and competitive in all segments, and it is up to each distributor and service station to decide what their final price will be, according to their cost structures.

The final price to the consumer varies depending on multiple factors such as: tax burden (municipal, state, federal), competition with other stations in the same region and the cost structure of each station (labor charges, freight, volume moved, profit margin, etc.).

In a similar speech, the federal government says it has no bearing on the increase and that it can do nothing about it. President Jair Bolsonaro only stated to the press that “fuel has become more expensive all over the world.

Contrary to what the representations say, subsidies and emergency exemptions in different spheres of government can make a difference in the economic equation. This is what anthropologist Natã reminds us: “holding back a little state taxes on fuel, creating emergency support for rural producers, for example. Social programs can also cushion the impacts on families in poverty. However, the scenario that the federal government creates does not create conditions for the states to be able to completely circumvent the crisis scenario. Inflation above 10%, the political weakening of the federal government, a disastrous economic program for the middle class and the poor, tend to limit the possibilities of minimizing damage”, he concludes.