S&P Global revises freight tax in Brazilian refined product IPPs

S&P Global Commodity Insights has updated its Platts Brazilian refined product Import Parity Prices on May 2, 2022, to reflect the application of the Adicional de Frete para Renovao da Marinha Mercante (Additional Freight for Merchant Marine Renewal) tax for ports in the North and Northeast regions of Brazil, as well as for the reduction of the tax rate for ports in the South and Southeast of the country.

The Brazilian government had previously levied a 25% tax on the total freight for fuel imports, which was applied only to ports in the South and Southeast. The exemption for ports in the North and Northeast expired on Jan. 8, 2022, according to government documents and market feedback. Following this expiry, a 25% tax was briefly levied on all ports before the Brazilian government revised the value to 8% in late March.

As a result, S&P Global is now applying an AFRMM tax rate of 8% to the freight component in the calculation of all its Brazilian gasoline, jet fuel and diesel IPPs, with the exception of the Manaus IPPs.

While the 8% tax is on the international portion of freight to Manaus, the IPPs at this port also reflect a 40% river navigation tax outlined by AFRMM legislation. The 40% river navigation tax is applied to the river freight from seaport of Macapa to Manaus, prior to the application of piloting fees.

For the LPG IPPs in both Suape and Santos, the 8% AFRMM tax is applied to half of the total freight from the USGC to Santos, to reflect a multi-port discharge for the product.

The affected assessments are:

Assessment name Daily code ($/b) Daily code (R$/cu m)

ULSD S10 Manaus BUMAA00 BUMAB00

ULSD S10 Itaqui BUITD00 BUITE00

ULSD S10 Suape BUSUD00 BUSUE00

ULSD S10 Aratu BUARD00 BUARE00

ULSD S10 Santos BUSAD00 BUSAE00

ULSD S10 Paranagua BUPAD00 BUPAE00

ULSD S10 Tramandai BUTRA00 BUTRB00

ULSD S10 Guamare BUGUA00 BUGUB00

ULSD S10 Duque de Caxias BUDEA00 BUDEB00

ULSD S10 Betim BUBTA00 BUBTB00

ULSD S10 Cubatao BUCUA00 BUCUB00

ULSD S10 Maua BUMUA00 BUMUB00

ULSD S10 Paulinia BUPLU00 BUPLB00

ULSD S10 Sao Jose dos Campo BUSJA00 BUSJB00

ULSD S10 Araucaria BUAUA00 BUAUB00

ULSD S10 Canoas BUCNA00 BUCNB00

Jet Manaus BJMAA00 BJMAB00

Jet Itaqui BJADB00 BJAEB00

Jet Suape BJADE00 BJAEE00

Jet Aratu BJADA00 BJAEA00

Jet Santos BJADD00 BJAED00

Jet Paranagua BJADC00 BJAEC00

Jet Tramandai BJTRA00 BJTRB00

Jet Guamare BJGUA00 BJGUB00

Jet Duque de Caxias BJDEA00 BJDEB00

Jet Betim BJBTA00 BJBTB00

Jet Cubatao BJCUA00 BJCUB00

Jet Maua BJMUA00 BJMUB00

Jet Paulinia BJPLU00 BJPLB00

Jet Sao Jose dos Campos BJSJA00 BJSJB00

Jet Araucaria BJAUA00 BJAUB00

Jet Canoas BJCNA00 BJCNB00

Gasoline Manaus BGMAA00 BGMAB00

Gasoline Itaqui BGITC00 BGITD00

Gasoline Suape BGSUC00 BGSUD00

Gasoline Aratu BGARC00 BGARD00

Gasoline Santos BGSAC00 BGSAD00

Gasoline Paranagua BGPAC00 BGPAD00

Gasoline Tramandai BGTRA00 BGTRB00

Gasoline Guamare BGGUA00 BGGUB00

Gasoline Duque de Caxias BGDEA00 BGDEB00

Gasoline Betim BGBTA00 BGBTB00

Gasoline Cubatao BGCUA00 BGCUB00

Gasoline Maua BGMUA00 BGMUB00

Gasoline Paulinia BGPLU00 BGPLB00

Gasoline Sao Jose dos Campos BGSJA00 BGSJB00

Gasoline Araucaria BGAUA00 BGAUB00

Gasoline Canoas BGCNA00 BGCNB00

Assessment name Daily code ($/mt) Daily code (R$/kg)

LPG Suape BLSUC00 BLSUD00

LPG Santos BLSAC00 BLSAD00

An IPP reflects the value of a product imported at a specific location on the day of publication. It accounts for the product price, as well as the cost to transport it from the production location to the delivery hub. It also includes fees associated with moving the product into a terminal, like inspection and storage.

The affected assessments are published on Platts Global Alert and Platts Refined Products Alert pages 166, 167 and 168; in the Platts Latin American Wire; and in the Platts price database under the codes above.

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