For association that represents large industrial consumers, expansion of social tariff for low -income families will impact the IPCA
A survey of (Association of Large Industrial Energy and Free Consumers) released this Thursday (3.Jul.2024) shows that the cost of electricity in Brazil goes far beyond the electricity bill that arrives at the consumer’s house.
According to the survey, 41.5% of the energy consumed is embedded in the cost of goods, 26.9% in the cost of services and only 34.7% is paid directly on the monthly invoice. Here’s (PDF – 4 MB).
According to Abrace, the impact of energy cost directly affects industry competitiveness, as well as being one of the main vectors of inflation. Products with strong energy weight at the final cost include:
- French bread – 29.8%;
- Milk and derivatives – 28.3%;
- Carnes – 27,2%;
- Cement – 31.6%;
- Glass – 29.8%;
- Cylinder gas – 53.1%;
- Water and sewage – 53.5%;
- Ceramic coating – 43.9%;
- Cheese – 92.5%.
The study also shows that the unit cost of energy for industry grew 1,299% from 2000 to 2024 in the case of electricity, and 2,251% in the case of natural gas. In the same period, the IPCA (National Consumer Price Index) accumulated high of 326%.
The evolution of energy prices in Brazil also surpassed international levels. In dollars, the price of electricity for Brazilian industry rose 231.4% from 2000 to 2024. In the same break, increases were 127.5% in the US and 100.2% in the European Union. Already the price of natural gas in Brazil grew 115.8%, while dropping 72.6% in the US market.
The association states that this increase contributed to Brazilian inflation to overcome the goal defined by the BC (Central Bank) by more than 50% from 2000 to 2024. The increase in energy prices, according to the study, led to increased cost of living, reduced investment, loss of collection and unemployment.
Reform of the Electric Sector
Abrace has criticized the reform of the electricity sector through the MP (Provisional Measure), which was sent by the government to Congress in May. The association states that, while the measure aims to relieve the cost of energy to low -income families, it transfers the account of subsidies to other consumers, especially high voltage industrialists, with side effects on production costs, prices and inflation.
The MP creates a new social tariff, with total light account gratuity for CadÚnico families with per capita income up to half a minimum wage (R $ 759 currently) and consumption of up to 80 kW/h (kilowatt hours). The measure comes into force this Saturday (5.Jul). However, you still need Congress to become law.
The reform also gives exemption from CDE (energy development account) to families with income from 1 to 1 minimum wage (R $ 1,518) and consumption of up to 120 kWh/month. The government estimates that about 60 million people can benefit.
According to Abrace, the cost of this policy will be passed on to consumers who remain in the captive market, especially industries. The association estimates that this will result in an increase of up to 20% in the cost of energy for high voltage industrial consumers. This increase, according to Abrace, tends to generate an additional 2 percentage point inflation pressure on the IPCA in the next 12 months.
The association states that, in addition to impairing industry competitiveness and compromising investments, the widespread transfer of charges to the productive sector aggravates the cost of living of the population by making essential goods such as foods, construction materials and public services, and public service.
