Airlines are charging the government and Petrobras for falling fuel prices

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Gabriel Araujo

SÃO PAULO (Reuters) – International airline association Iata has asked the federal government and Petrobras to adjust the way aviation fuel is levied in Brazil, classifying aviation gas prices as “excessively high”.

The International Air Transport Association (Iata) said in a statement this Monday that local prices “do not reflect the reality of oil-producing countries”, adding that they are one of the main problems facing the sector in Brazil.

Petrobras adjusts jet fuel prices at the beginning of each month to reflect factors such as global oil prices and exchange rates.

“Petrobras’ monopoly position and additional administrative costs charged by the supplier lead to artificially inflated prices for jet fuel,” said IATA Americas chief Peter Cerda.

Petrobras and the Ministry of Mining and Energy did not comment.

Fuel prices have been the subject of complaints from local airlines, with Azul chief executive John Rogerson saying last month that Brazil has “the most expensive fuel in the world”.

Aviation fuel accounts for about 40% of total airline costs in Brazil, while the global average is 30% “during a period of exceptionally high prices worldwide,” according to IATA.

The group also complained about the taxes levied on gas in Brazil, saying they were “further negatively affecting the competitiveness of the sector”.

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