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00:00:41Welcome to Everything is Economy, new
00:00:43gasoline doesn't even reach week, new increase in fuel
00:00:46prices. Have we already reached maximum values,
00:00:50or will gasoline and gas oil continue to
00:00:53rise? How can this escalation be stopped? Are the measures that the
00:00:57government announced sufficient to deal with the problem? Is
00:01:00the state gaining more from rising prices? Will
00:01:04this crisis further accelerate the energy transition
00:01:08in the automotive market in Portugal? Questions that we will analyze
00:01:11today with Nuno Ribeiro da Silva, former president of Endez,
00:01:15a specialist in energy issues, and with
00:01:18economists Alexandra Abreu and Pedro Brinca. Welcome,
00:01:23the thank you for your presence. Naturally, Nuno Ribeiro da Silva, let's start with
00:01:25you. Are we facing maximum values for
00:01:29gas oil and gasoline, or are new increases expected in your
00:01:32opinion? No one can say that we are at the maximum
00:01:36values, unfortunately. What we see is
00:01:39an enormous volatility,
00:01:43due to the statements and events that occur,
00:01:46and the events can be very varied. It's not just the
00:01:49issue of oil and
00:01:56gas for essentially in refined natural gas delivery that worries me a lot, and in the market,
00:01:59the damage that is caused
00:02:04that the to the gas pipeline, to the pipeline, to the tanker, to
00:02:07the LNG carrier, to the refinery.
00:02:11Therefore, due to
00:02:13the news that keeps emerging every moment
00:02:17about the disruptions caused by all
00:02:20this logistics and the
00:02:23fossil fuels, namely oil
00:02:26and gas, there is a market reaction that is very
00:02:30fast, very sensitive. Let's not forget that the oil
00:02:33market is the largest market in the world.
00:02:37What is traded daily
00:02:41is equivalent to
00:02:44desire to eat with the physical oil. We are talking about
00:02:47about 5% of the
00:02:51transactions that are completed. In other words,
00:02:53it is a volatile market, an extremely
00:02:57nervous market. It's ready to go up,
00:03:00isn't it? And to go down too, and to go down, it's not
00:03:04the perception that you have, is it? With prices, I don't know if that's
00:03:08reports anticipate that the the perception. It's more about the pump, the so-called pump
00:03:11price, in terms of raw materials.
00:03:15There is a lot of fluctuation, but at the pumps, there's this
00:03:18perception, at least the perception that it goes up very quickly,
00:03:22but then when it's time to come down, it takes a bit longer. Is this
00:03:25perception or is it actually happening? Well, there are several
00:03:28reasons for this.
00:03:32Historically, whenever there are these types of situations,
00:03:35governments, the American government itself recently and currently with the
00:03:39American president, sort of
00:03:42shrug off the blame to insinuate
00:03:46that there's speculation, that there's
00:03:49cartelization, that there are secret meetings
00:03:52for price fixing and mischief,
00:03:55let's say, among the players in the oil
00:03:59chain. What happens is that
00:04:02there are a whole series of
00:04:05economy to parameters in the price paid at the pump that
00:04:09are not just the cost of the raw
00:04:13material. And for example, this type of
00:04:17mechanism that has been used
00:04:21when there is a
00:04:24rise in price
00:04:27to compensate for the VAT, there is more that governments charge.
00:04:30They reduce
00:04:34the specific tax, the so-called ISP, the special tax on
00:04:37petroleum products. When
00:04:41there is such a decrease, also
00:04:44what was discounted in the ISP is taken
00:04:48back. Therefore, there is no direct reflection between the
00:04:51behavior of, let's say, the fundamentals,
00:04:55which give reason to the
00:04:57price, and
00:05:00the immediate reflection in
00:05:03our pocket, right? I know our
00:05:08I hope, I don't think it's an optimistic scenario, but I hope that in a pocket is the most sensitive organ of our body, but
00:05:11what happens is that there are indeed
00:05:14reasons. In this moment, the
00:05:18price of oil since the war began was
00:05:21approximately $75, it is at
00:05:24$100. It is not something
00:05:27extraordinary. There were many times when the price of a barrel was $100
00:05:31and people lived peacefully and without
00:05:35great nervousness.
00:05:37The problem is that here there is an
00:05:41accumulation of
00:05:44really a price of around 28%
00:05:47of the barrel, but an accumulation of more than
00:05:50100% in the price of final products,
00:05:54of the so-called refined products, diesel,
00:05:57gasoline, jet fuel, aviation
00:06:00fuel, etc. All the myriad of products that
00:06:03come from that fantastic product which is crude oil
00:06:07and to give you an idea, the
00:06:11barrel of oil is at... $100 today, around
00:06:14that. The equivalent of a barrel of gas oil is at
00:06:18$200. Therefore, there is indeed
00:06:22a huge
00:06:25weight of the perception
00:06:28of reality that the market is very
00:06:321.4 million barrels per day of gas
00:06:35oil in the market, and therefore there is a
00:06:39lot of pressure on the
00:06:42refined products, which, in short, gives a nice
00:06:45premium to refineries.
00:06:49But that's life. Alexandra
00:06:52Abreu, in your
00:06:55opinion, have prices already reached their
00:06:58peak, or are we still very much in doubt, and the worst is
00:07:02yet to come? Good evening, Rui. Good evening, Engineer Ribeiro da
00:07:06Silva. Good evening, Pedro. Good evening, viewers.
00:07:08As the engineer said, it is
00:07:12very difficult to make predictions regarding this matter, isn't it? What we know is
00:07:16that the fundamental reasons for this
00:07:19fuel price shock, which then becomes a
00:07:23shock also in terms of the cost of living in a more general way, are
00:07:26fundamentally related to the contraction of supply. There is a real
00:07:30supply contraction, according to the estimates I read, that I found, of the order
00:07:34of something like 6% in terms of the total world oil
00:07:38production in 2026. There is
00:07:40an effective contraction.
00:07:42There is also a very specific constraint at the refining
00:07:46level, which, incidentally, explains the extraordinary
00:07:49refining margins that many, many oil companies are managing
00:07:52to obtain. This has to do with what is happening in the Gulf, in
00:07:56Hormuz, it also has to do with what is happening in Russia. This combination of
00:07:59constraints and limitations
00:08:02suggests that, moreover, it has been causing
00:08:06a very significant price increase, because it has its
00:08:10effective origin in the restriction of supply, and most of the
00:08:14specialists in the sector that I have seen at an international
00:08:17level, the estimates from specialized
00:08:21recovery will not occur before 2027. So probably in the
00:08:25coming months we will continue to face this, bearing in mind that this is
00:08:28still very dependent on the geopolitical dimension
00:08:32evolution, but can we go back to having prices like we had, when I say price
00:08:36I'm talking about pump prices, final prices, can we go back
00:08:40to having prices like the ones we had. It's not that they were that
00:08:43spectacular, but anyway, they were better than now, the prices
00:08:46we had before this war started with Iran. Well, I think that's really the question that needs to be asked, because
00:08:50we, Portugal, cannot have
00:08:54any kind of impact on international oil
00:08:57prices, but it can influence how the bill
00:09:01is distributed within our country, between families,
00:09:04businesses, the state, it can somehow, through public
00:09:08policies, define
00:09:11whether it goes more one way or the other, and everything we have seen so far in general is that
00:09:14the bill is being paid almost exclusively by families or by small and
00:09:18medium-sized businesses in general. The state, despite some measures
00:09:22it has been taking, especially recently, they are announcing, we will
00:09:26analyze them exactly, exactly. But in fact, for now, it is not
00:09:30really taking a stance in terms of public policies that
00:09:33involves assuming a significant part of this
00:09:37impact. We also have in the oil chain some
00:09:40companies, namely oil companies, that have the refining part and are making
00:09:44extraordinary profits and in this sense it is fair that they should be called
00:09:48upon to contribute to financing some of the measures that would then allow
00:09:52or would have allowed, and in my opinion that is also where we should act
00:09:56more decisively, at the level of reducing the final prices
00:10:00themselves. In fact, just look at the Spanish example, for instance,
00:10:02where not only, to remember last week's conversation, not only
00:10:06at a level Portugal started
00:10:10with higher prices than fuels in Spain, but throughout this year, for
00:10:13example, diesel increased by 62 cents per
00:10:17liter, from January until now, in Portugal, in Spain it increased by 45 cents,
00:10:20so Spain acts much more decisively with many more public
00:10:25policies. We will analyze that issue of policies
00:10:29at the initial price, what is the growth rate compared between the two,
00:10:32as it's from a lower base, it will
00:10:35make the calculations. The Spanish government committed 5
00:10:38million euros
00:10:40for the unilateral reduction of VAT,
00:10:44and they are losing 5 million euros with
00:10:48that measure. We will analyze this issue of the decisions that the government has been
00:10:51taking, the governments, I would even say, Pedro, how do you see
00:10:54this issue of fuel prices? Will we be at the maximum
00:10:57possibility of returning to the prices we had before the
00:11:01war with Iran, if things calm down internationally? Well, since I was the third to answer the question, I had time to
00:11:05Google, right? So I went to look at the futures markets, the present
00:11:09value of WTI. What the futures markets suggest is a decrease in the price
00:11:13until January 2027, which was the horizon I saw there. So the markets
00:11:16are anticipating a decrease in the price of oil
00:11:20in the coming months. But
00:11:24even if we didn't look at the futures contracts, what do we have? We
00:11:27have a sharp escalation towards electrification,
00:11:31the energy transition. We have an increase
00:11:34in efficiency of batteries, we have an increase
00:11:37in autonomy. And this is just
00:11:41naturally referring to the issue of cars. So
00:11:44structurally, what seems to me is that in fact we
00:11:48have already come a long way to be less
00:11:50dependent on the prices of
00:11:53hydrocarbons. The more this path is
00:11:56followed, and this price increase, there it is,
00:12:00also has a positive side, which is to accelerate this. Whoever can do it and
00:12:03has the conditions to do it, perhaps with this price increase, will do it even
00:12:07faster. Structurally, it seems to me that we are heading towards a
00:12:10scenario in which the price of oil, if not to say, could return
00:12:14to old prices, even drop below the prices that were
00:12:17previously. China, for example, with an enormous consumer, is also undergoing a
00:12:21brutal energy transition movement.
00:12:24Obviously, there will be no shortage of consumers for hydrocarbons in the
00:12:27next 50 or 100 years, India and other countries that are still
00:12:30accelerating in the economic development part, but
00:12:34it seems to me that no, it seems to me alarmist to
00:12:38think that oil will now continue to rise without stopping, right? I mean, that doesn't
00:12:41exist. It doesn't seem to me to be the case. The impact on
00:12:44inflation arises, it obviously arises directly
00:12:48because petroleum derivatives are used for fuel
00:12:51in final consumption, and a large part is used
00:12:55in the production of everything else. Everything else requires energy, and in
00:12:58particular, some goods are particularly sensitive precisely to the cost
00:13:02of energy, namely, for example, foodstuffs, right? If in the
00:13:05medium term, looking at a period of months to
00:13:08a year, this inflation will translate a lot, will transmit a lot to
00:13:12foodstuffs. Then we have mechanisms within our
00:13:16economy of indexation to inflation, whether in pensions, whether in
00:13:20rents, whether in wage negotiations,
00:13:23etc., that ensure that even a temporary increase in
00:13:26inflation that affects a certain year will propagate in the following
00:13:30years. This obviously causes the European Central Bank
00:13:33to have a problem here, which is they have a commitment
00:13:37to reach 2% in the medium term, we are talking about two
00:13:41years. Raising interest rates to react to a direct effect of energy
00:13:44makes no sense. It's not by raising interest rates that more oil will come
00:13:48from the Middle East, but
00:13:51indirectly it raises a question that is, from the moment that the agents...
00:13:55families, companies begin to anticipate higher
00:13:58inflation for a longer period, both in terms
00:14:02of wage demands, wage negotiations, higher values, and in terms of
00:14:05entrepreneurs themselves believing that inflation will be higher for a longer
00:14:09period, they will also incorporate this into their
00:14:13pricing plans. All of this generates inflation by itself, and there
00:14:16are indeed signs that inflation expectations, what people
00:14:19think inflation will be, are already disconnected from the 2%
00:14:23target. In such a scenario, the European banks have no
00:14:26alternative but to intervene by raising interest rates, and
00:14:30at this moment the markets are pricing in an interest rate hike
00:14:34of 25 basis points by the end of the year, with a probability
00:14:38above 50%. It is very likely that this will happen if the
00:14:41markets are correct, and this is more or less the scenario that
00:14:44we are living in. For energy to continue
00:14:48to accelerate inflation or to push inflation
00:14:51up even further, we would have to have constant increases in the price
00:14:55of oil. I mean, there's no scenario I've
00:14:59seen where that's possible. Now, let's
00:15:02see, events of very low probability,
00:15:06suddenly the whole Middle East explodes and everything
00:15:08starts in a completely open war that destroys
00:15:12capacity, that makes international shipping
00:15:16much more dangerous and expensive due to insurance,
00:15:19etc. Of course,
00:15:22of course. Now it doesn't seem that
00:15:26we are close to that scenario, and I
00:15:30believe that in a year,
00:15:33year we won't be talking about this in the news.
00:15:37Nuno Ribeiro da Silva, there's a question that everyone asks a bit, which is that people
00:15:41bought diesel cars because diesel was cheaper than
00:15:45gasoline. You just mentioned that oil is at $100, refined
00:15:48diesel is at $200. Why
00:15:51has the increase in diesel prices been much greater than that of gasoline?
00:15:55Because on the one hand,
00:15:59there is much less consumption of gasoline than diesel, namely in
00:16:03Europe. And
00:16:05the consumption. To give you an idea, in
00:16:08Portugal, the annual consumption of diesel is around
00:16:126 billion liters. It's easier to talk about
00:16:16liters, it's easier to see. While
00:16:21a third of this, it's about 1.7
00:16:24million liters.
00:16:27Therefore, and not only does diesel have uses other than just
00:16:31for road fuel, diesel for agriculture,
00:16:35diesel still used in many industrial processes,
00:16:39diesel still used in many heating
00:16:42and air conditioning.
00:16:44Then in fact, there has been,
00:16:48for several years now, with the increase
00:16:52in efficiency of diesel
00:16:55combustion engines, and
00:16:58with the increase in the
00:17:02performance of diesel vehicles,
00:17:05there has been a shift
00:17:08in consumption preference from gasoline to
00:17:12diesel, but above all there is this aspect.
00:17:16Diesel not only in road
00:17:19consumption, which is around 4 billion, but
00:17:22then there are another
00:17:252 billion liters that are
00:17:28used
00:17:31economic activity, in
00:17:34businesses, in agriculture,
00:17:38etc.
00:17:40What do we have? We have
00:17:44indeed a shortage of refining
00:17:47capacity, namely
00:17:49in Europe. There was a
00:17:53reduction from 2019
00:17:56to the current to
00:17:592026 of about 25
00:18:02million barrels being produced
00:18:06by refineries in Europe to 19
00:18:10million. Russia took advantage
00:18:14of this process,
00:18:16meanwhile we know what is happening
00:18:21with the shutdown of refineries
00:18:24and due to the conflicts, due to the
00:18:27maintenance in Russia and the Middle
00:18:30East also took advantage of this process within a comprehensible
00:18:34strategy that has been followed by them.
00:18:37As holders of the raw material,
00:18:40they developed the industrial area to
00:18:44add value, to add value to the
00:18:48value chain. Therefore, they received many
00:18:51refineries and became
00:18:54very relevant exporters of
00:18:58finished products, let's say. What happens,
00:19:01to make matters worse, is that while to leave
00:19:04that other one, which is the Persian
00:19:08Gulf, there are
00:19:11pipelines that transport out of the
00:19:15Gulf by crossing
00:19:18the Arabian Peninsula to the Red Sea or even
00:19:21exits already to the south in the Arabian Sea
00:19:25to the south of the obligation to
00:19:28go around the Persian Gulf, the Strait of Hormuz,
00:19:31incidentally, while there
00:19:35is not the same
00:19:38alternative for the outflow of
00:19:40products such as refined products, gas,
00:19:43and therefore there is
00:19:47a bottleneck,
00:19:50let's say, of
00:19:53refined products that are processed
00:19:57in those countries in the Gulf,
00:20:00that in fact the alternative they have to leave is by
00:20:03ship, and with ships we know how things have been. You just said
00:20:07that you were also concerned, I don't know if that was the expression, about the issue of
00:20:11gas. Is an increase in gas prices expected in the coming
00:20:14increase in prices? The three largest gas
00:20:18producers on the planet are the United States, which is the largest producer, as it is the largest producer
00:20:22of oil, by far.
00:20:25And then Russia
00:20:28and Qatar. What happens is that, namely for
00:20:32Europe, we have restrictions
00:20:35on buying gas, namely from the Russians. We know since
00:20:382022 what this has been.
00:20:42The big gas producer,
00:20:45the big exporter
00:20:48from the Gulf is Qatar. Qatar has
00:20:52really this constraint of
00:20:55only exporting by
00:20:58ship through the liquefaction of gas and therefore the
00:21:01LNG carriers that bring the gas to Europe or
00:21:05Asia. At this moment,
00:21:08this is very restricted.
00:21:11The production base of gas
00:21:15in Ras Laffan also suffered
00:21:18damage in the areas of the gas liquefaction
00:21:21units. That's not really where the problem has been, because
00:21:25it was about three units out of about
00:21:2917, but in fact the outflow
00:21:33capacity, moreover, the LNG carriers are
00:21:36much more sensitive vessels, much more expensive,
00:21:39with much higher insurance, much more vulnerable
00:21:43than oil tankers. And therefore, the
00:21:46shipowners, the insurance premiums, immensely
00:21:50affect
00:21:52the risk operation of these
00:21:55LNG carriers, and that's why I say
00:21:59that I'm concerned about this from the supply side. On the other
00:22:02hand, regarding demand, focusing
00:22:05again on Europe, what is happening is that we
00:22:09are delaying, postponing
00:22:13cyclical replenishment that always happens every
00:22:16year, of the reserves of...
00:22:20namely of gas to face the winter.
00:22:23In Portugal,
00:22:26we don't have that much culture, also because natural
00:22:30gas is relatively new in our country, and
00:22:33but all that central Europe, including
00:22:37Germany and the Netherlands,
00:22:40Belgium, England, etc.,
00:22:43use a lot of
00:22:46air conditioning, for heating in winter. What has been happening,
00:22:50and the markets know this, is
00:22:54replenishment that normally occurs
00:22:57from, let's say, typically from July,
00:23:01of the storage capacity of
00:23:05gas deposits, of gas caverns,
00:23:09and where gas
00:23:12is stored to be burned
00:23:16in the period of greatest consumption, which is winter, has
00:23:20been postponed again and again in the hope of operators that
00:23:24prices will come down, but what has been happening is that prices are going up.
00:23:27We are also at 77
00:23:30dollars, euros per megawatt, which is an
00:23:34easy indicator to remember. Now,
00:23:37when Russia reached
00:23:39350, it reached 350, but
00:23:43in any case, we actually have repressed
00:23:47demand that will
00:23:51eventually come to the surface, not to mention Asia.
00:23:54We have two major
00:23:58players, two major exporters and suppliers to the world
00:24:01market, Qatar and Russia, constrained for the
00:24:05reasons that have been stated. In terms of what are the measures to deal with this problem
00:24:09in the case of rising fuel prices, but possibly also gas at a later
00:24:12stage, from your point of view does it make more sense to reinforce family
00:24:16income, as the government has said, or to immediately
00:24:19lower the burden on fuels to ease prices
00:24:22and wallets? What makes no sense is
00:24:25to distribute money from the balcony,
00:24:29that is, we are in a, we return here to a
00:24:33topic a while ago, we have 8 billion
00:24:36liters of diesel and
00:24:40gasoline consumed in Portugal, 8 billion
00:24:44liters, a subsidy of 10
00:24:47cents means 800 million.
00:24:50euros, it's a lot of money in our
00:24:55withdraw from tax revenues,
00:24:59with the consequent imbalance of
00:25:03public accounts,
00:25:06that is, to do, there is a balance that
00:25:09was made and which colleagues should
00:25:12know about the practical effects
00:25:15that
00:25:18there were, namely in the... Western
00:25:21supports eh that were given at the time of the
00:25:25Gulf War also eh in the
00:25:28decade of the
00:25:32at the end of the decade of 2010 eh
00:25:35the support
00:25:38that eh economies gave eh or that
00:25:42states gave to economies. Well, the
00:25:46balance that is made eh
00:25:48clearly points, I think I was reading an article eh, well, by the renowned economist Professor
00:25:52Ricardo Reis, who was about to
00:25:55enter, but didn't, it
00:25:59seems Trump didn't like it.
00:26:04and he says exactly in a recent article not to repeat the
00:26:08mistakes of the past and a
00:26:10series are indiscriminate aid, they are exactly
00:26:14indiscriminate aid and
00:26:17- the other day I was saying there what that means is the government should not be
00:26:20lowering the price of
00:26:24fuels for everyone, it cannot be lowering it because it's
00:26:27sustainable. Eh, as I said, 10 cents is
00:26:31perhaps little today. Because between
00:26:342.20 cm per liter,
00:26:372.10, we continue to be angry and we continue to have
00:26:41uncomfortable pressures
00:26:43at least, eh, 10 cents means
00:26:47giving up 800 million euros, that
00:26:50is, eh, which is clearly
00:26:53advised by the World Bank, by the European Central Bank,
00:26:57eh, by the International Monetary Fund, by the
00:27:00general. the
00:27:02ECB, exactly, everyone says the same thing,
00:27:06it's eh, there's a moment of crisis, we have
00:27:10two scenarios, either this is going to last a long time, then,
00:27:13as the other gentleman said, get used to it,
00:27:16because there is no eh recipe eh and
00:27:20palliative for us to take cortisone our whole lives,
00:27:23eh, if it is foreseen or there is an expectation,
00:27:27hope eh that
00:27:30eh, hope as... strategy, no, if there is an
00:27:34expectation that eh this will be
00:27:37temporary, whatever that means,
00:27:40then very well, so as not to completely
00:27:44derail eh,
00:27:46whether companies, whether families,
00:27:50eh, that there is a concern
00:27:53to pour some water on the fire, but
00:27:57in a very cautious way, very
00:28:00cautious, it's not... generalize the discounts
00:28:04I spend 150 liters of gasoline per month, that
00:28:07is, it's not - very
00:28:10reasonable that the state is giving up revenue from taxes for me to be a relatively large
00:28:14consumer of gasoline
00:28:16eh, now in terms
00:28:20of exposed sectors, industry
00:28:23eh that has to resort
00:28:27in the process, in the process
00:28:31to derivatives. oil, eh, in
00:28:34agriculture, in transport, eh,
00:28:37critical families, solution, what is
00:28:41pointed out, as is somehow done in
00:28:44electricity, eh, with the so-called social tariff,
00:28:48is to have support, to have
00:28:50voters, eh, who help
00:28:54families who are notoriously more
00:28:57deprived, more exposed to
00:29:00this peak. crisis or
00:29:04we shall see to have
00:29:06and let's say a
00:29:10support judicious, balanced eh
00:29:14so as not to not suffer such a great impact.
00:29:17Alexandra Abreu eh does it seem like a correct strategy or not
00:29:21really? I agree on some points and disagree on others, no? Eh
00:29:25it seems to me that the assumption is always that this is a temporary shock, it can last longer
00:29:29or shorter, but the assumption is a temporary shock that we know the underlying
00:29:33reasons for, which have to do with the conflict, destruction of productive capacity,
00:29:37disruption in the distribution chains associated with
00:29:40fuels. In that sense, assuming that the
00:29:43conflict is not eternal, it is perfectly solvable.
00:29:46Ha, there's another underlying issue, by the way, I can't help but refer to that too, which
00:29:50is the issue of rising prices as a virtuous signal for the
00:29:54energy and carbon transition. I doubt anyone at this table,
00:29:57with all due respect, with your
00:30:01concerns.
00:30:09and ecological credentials, but I doubt, I doubt, I doubt they have, I doubt they have more ecological concerns than me, they may not have less, but they won't have more,
00:30:13no, the price is what drives ecological concerns, but what I
00:30:16think, what I think about this is that an energy transition
00:30:20made on the backs of families' pockets and in
00:30:23particular those with less purchasing power is not a just transition and that's what no one here said, but that's
00:30:27what I'm saying, it's my opinion and that's why and that's why
00:30:30and that's why what I think is I am in favor of all investments in
00:30:34electrification, I am in favor of all investments in strengthening public
00:30:38transport, its quality, comfort, accessibility, schedules
00:30:41and everything else, to create incentives for people to use public transport as much as possible, for
00:30:45goods to be transported by railway instead of eh by
00:30:49road, a gross strategic mistake that this country made in recent decades, I am
00:30:53in favor of all that, but to think that the transition will be made,
00:30:56taking advantage of this brutal increase in the cost of living
00:31:00that is penalizing the idea is clear.
00:31:04Now, regarding the support, it should be directed, targeted, or two
00:31:08generalized notes, two notes, the first is that it doesn't seem
00:31:11reasonable to me that the food basket
00:31:15has increased 6% since the beginning of the year, 36% since
00:31:182022, that families have to bear more than 30 € to
00:31:22fill their tank every time they fill their fuel tank
00:31:26on top of the increased cost of food
00:31:30and now also on house payments in many cases, and that the state is not
00:31:33willing to give up some of the tax revenue and remains
00:31:37committed to the objective of budgetary balance in this
00:31:41context that already has characteristics of a macroeconomic crisis
00:31:44because effectively if inflation starts to skyrocket, we have inflation, we have
00:31:48a social and distributive problem, we have,
00:31:51we have some risk of eh of starting to slow down, of approaching stagnation, there is
00:31:55a risk of that happening, companies can start
00:31:59to be, especially SMEs can be very pressured, so it doesn't
00:32:03seem to make any sense for the government to continue
00:32:06committed to a goal of budgetary balance in the face of a
00:32:09situation that is a cost of living emergency, and that's
00:32:13why I'm in favor of doing it.
00:32:17the government has applied a discount, but the question was different, the question was whether the aid is generalized, should the
00:32:21aid be generalized or directed to needy
00:32:23families and to the companies most dependent on
00:32:27fuel? It's not that the question is the following: it's that protecting
00:32:30and avoiding an excessive excessively rapid increase, which in principle is
00:32:34temporary but excessively high, in the price of fuels is not just subsidizing
00:32:38motorists, it's ensuring that the poorest families who spend a larger part
00:32:41of their income on consumption, and in particular on consumption,
00:32:45consumption of food products, are not affected
00:32:47so significantly.
00:32:53As we know, as we also know as economists, that is,
00:32:57eh, a budgetary imbalance is not just a
00:33:00fetish, and in particular in a situation where we have
00:33:03inflationary pressure, that is, eh, that
00:33:06means having to finance deficits in the markets,
00:33:10eh, that will also
00:33:13have effects. that reflect a whole macroeconomic
00:33:17imbalance that we're going to have to
00:33:20pay
00:33:26the policies followed by the Socrates government that
00:33:28we've been
00:33:31the objective is not macroeconomic stimulus, the objective is to give the
00:33:34objective is to contain the inflationary process in a
00:33:37way, in a way, no, no, but that idea that only monetary
00:33:41policy can respond to inflation cannot respond directly by giving up some tax revenue.
00:33:45In a country where a good part of fuel prices is
00:33:48taxes, especially, especially especially looking at a macroeconomics
00:33:52textbook, a fiscal expansionary policy does not contribute to
00:33:56inflation, you have two effects at the same time, as you know, you have two effects at the same time, on the one hand you are
00:34:00directly affecting the cost structure at the same time, but it is indiscriminate. I would
00:34:03accept it if it was targeted, then I agree with you, but
00:34:07you are not defending that, you are defending
00:34:10an expansionary fiscal policy by pouring revenue into everything. I am
00:34:14defending.
00:34:16I am advocating something that is so possible, which is what is being done in
00:34:18Spain. and that is your definition of the correct
00:34:22policy, it is more correct, it is more correct than what is being done
00:34:26here because it protects, because it protects families more, especially the poorest ones,
00:34:30the most
00:34:33studies 5 million so far in
00:34:37tax revenue eh in an absolutely
00:34:40indiscriminate way,
00:34:43the measure to lower VAT.
00:34:47of the discount, both deserved the discount on the ISP or on VAT, in the case of VAT in
00:34:50Spain, richer families than poorer families,
00:34:53right, right, but in aggregate terms,
00:34:57in aggregate terms, low-income families end
00:35:00up receiving more and
00:35:02small and medium-sized businesses that also have greater
00:35:06difficulties facing this crisis due to cash flow difficulties and due to
00:35:10cost difficulties are also the ones that are most affected by the balance sheet that was
00:35:13made of the aids. In the previous crisis, at the time
00:35:17right after Russia, the balance sheet was made,
00:35:204/5 of the money allocated
00:35:23eh for those supports, 25%
00:35:27were completely
00:35:29eh ownerless, so to speak, they were not
00:35:33affected, directed,
00:35:374/5 of the money thrown from the balcony is not a
00:35:40study, there are several
00:35:44studies. countries where, when we look at the IMF, for every 100
00:35:48euros of fuel price decrease, 34 go to the richest 20%, nine to the
00:35:51poorest 20%. This is from the IMF, I could be talking about France, that
00:35:55is, we have so much evidence of what happened in
00:35:582022 to understand this measure, in
00:36:01theory it was already idiotic, but with all the empirical evidence
00:36:05we have, with all the literature that has been published, to insist
00:36:08on this, I have no words, I don't know, I
00:36:11am, I am speechless, I don't know what to say.
00:36:15This is a measure that puts much more money in the pockets of the rich than the
00:36:18poor, that is, we can be very, I understand part of the goodness of the
00:36:22measure, because it is somewhat targeted, as Alexandre said
00:36:26very well, families. The poorest have a greater
00:36:30weight of food and energy in their budget than richer families. Pedro
00:36:33bringa, but how can a family, a needy
00:36:37family, go to the gas station to put gasoline in the
00:36:40car, for example, and pay with the money the government gives them instead of
00:36:43arriving at the gas station and having much
00:36:47less help, because in terms of fiscal expenditure, the state has to pay for that
00:36:51diesel for disadvantaged families, but it also has to pay for the diesel, as a colleague
00:36:55of mine, António Nogueira Leite, said, for those who put
00:36:58gasoline in their Ferrari, as is obvious, as it should be obvious, I don't need all those
00:37:01empirical studies that were cited here and others that I have
00:37:05here that I can cite for France, for Spain, for a
00:37:08comprehensive IMF study, to understand that this measure makes no
00:37:11sense at all, it makes no sense at all. We have much more effective mechanisms to
00:37:15get money to those who need it, and we should help those who need it,
00:37:19not everyone indiscriminately, very well, even in Portugal and
00:37:22while we wait for that, the bill at the end of the month continues to rise, but wait, you
00:37:26asked me. What they asked me here as a social
00:37:30scientist is to tell me what is the most effective measure
00:37:32to minimize fiscal expenditure, is it the
00:37:36best measure in the world or is it if this is positive or not, this is
00:37:39negative.
00:37:43best measure in the world, but it's better than not doing it, no, because you
00:37:46spent, look at one thing, the state, the state will put much
00:37:49more money in the pockets of the rich.
00:37:50ricos
00:37:54not in relative terms and not taking into account the cost structure effect. Measures
00:37:58on how the government intends to proceed, it's not just the government, at the European level the question is being
00:38:02asked to tax
00:38:05eh the unexpected profits, the
00:38:08windfall profits, the excessive profits, if we can say so, eh of the
00:38:12oil companies. Does this make sense? Measures like limiting
00:38:15margins for gas stations or even setting
00:38:18maximum prices are measures that from your point of view can make
00:38:22sense as temporary measures to mitigate
00:38:25the impact of this. Prices. Wow, let's
00:38:29see. Eh, we are here, eh, with the
00:38:32hope, as, as I said earlier, the
00:38:35strategy, hope as strategy, no,
00:38:39that, eh, this will not last long. The
00:38:42invasion eh, of Ukraine we also
00:38:45thought it was something that would not take long.
00:38:48It's already been 4 years, the contribution to inflation has to dry up, unless
00:38:52it continues to rise to 1. for
00:38:55here, over. the question of Ukraine that is
00:38:59as it is, eh furthermore,
00:39:02eh this, this situation of the
00:39:05Gulf which in the energy
00:39:08plan joins hunger to the
00:39:11crisis also eh in part
00:39:14energetic eh in the context of the war in Ukraine with
00:39:17Russia eh all
00:39:20believe that this will end quickly,
00:39:23but there is no crystal ball that guarantees
00:39:26us that. eh, besides, eh, it depends
00:39:30on the damage that eh has been created in the energy
00:39:33infrastructure, it depends on whether Iran
00:39:37eh manages to impose
00:39:40eh a tax on
00:39:42the transit of ships
00:39:45that will become another cost factor, that is, for
00:39:48inflation to continue to rise, that means there must be more and more restrictions on oil because it is not
00:39:52a level jump for inflation to end.
00:39:56acabaro.
00:40:02richer received from the discount 64 to
00:40:05115 € and the poorest 25% 29 to
00:40:0848 and in Italy the richest decile received
00:40:116.5 times more from the cut than the
00:40:14poorest, in Portugal the Zero VAT gave the fifth richest 20% more
00:40:18resources than the poorest while the support for vulnerable families channeled 71%
00:40:22to the fifth poorest, this is
00:40:24Portugal.
00:40:27with social justice then disappears in direct taxes in progressivity when we discuss
00:40:31the progressivity of IRS, then there is no concern, the concern only
00:40:35exists, it only exists when it is at
00:40:37home, only the concern with
00:40:40this, only the concern with we are giving too much to the rich when
00:40:44we talk populism
00:40:47is a lie, I'm going to tell you why it's a lie because direct taxes are more
00:40:51progressive, no, because today I was live criticizing the IRS
00:40:55measure as an aid measure
00:41:07households in Portugal do not pay IRS and 25% of families
00:41:10account for 75% of revenues,
00:41:13it won't go, it won't go to the poorest, so it's a lie and I hope you retract
00:41:17now.
00:41:19Congratulations, I don't know if you also defend higher IRS rates in general for the
00:41:22rich like I do.
00:41:26I don't know if the topic today is not IRS, nor IRS progressivity,
00:41:30nor the maximum rates of IRS, the
00:41:32only thing I want to know your opinion on is
00:41:35if it makes sense to apply measures like I asked Nuno
00:41:39Ribeiro da Silva. how to limit the margins of eh
00:41:42oil companies, how to set maximum prices
00:41:45temporarily and even this
00:41:47tax,
00:41:49we had the experience that we should have already forgotten, eh
00:41:53of the government of Engineer António Guterres when
00:41:57in an eh impulse eh in the
00:42:00parliament he said that eh gasoline
00:42:03prices were not going around
00:42:062014, they were not going beyond the value that I don't even remember what it was...
00:42:10stipulated, that is something that
00:42:13even two years ago we were paying for, France did the
00:42:17same thing when there was the price peak crisis
00:42:20eh with the war with the
00:42:24Russians eh and in 8
00:42:27months accumulated 45 million euros in
00:42:31charges for the budget, therefore, in the first
00:42:34place, the question of defining and
00:42:38ceilings on... prices is a
00:42:42situation I would say childish
00:42:45eh, because it doesn't work, the prices
00:42:48eh that are formed in the market,
00:42:51whether of the raw material of oil, whether of
00:42:54refined products, whether of freight of all the logistics
00:42:57eh of the energy market
00:42:59eh, excuse the expression, it's
00:43:03indifferent to eh
00:43:07for Portugal, for... of
00:43:10China, for whoever is going to set
00:43:12ceilings, it's eh and
00:43:16recent experiences eh are
00:43:19evident
00:43:21eh of the damage that we have in
00:43:23Madeira.
00:43:26The other aspect that I referred to was about limits
00:43:30to margins and
00:43:31taxing.
00:43:34Eh, I frankly, I frankly don't like
00:43:38that idea. there is some quickness in the excessive
00:43:41profits, the question of excessive profits, what do companies
00:43:45pay corporate income tax for? If they have more profits,
00:43:49they will pay more taxes.
00:43:52Eh, who defines what is
00:43:55an excessive profit for an oil company, for a
00:43:59grocery store, for a kiosk in the Prince Royal Garden? No, and
00:44:03Galp's profits come from outside the country.
00:44:06That is, in general terms, in general terms,
00:44:11it is very, it is absolutely
00:44:14random to define what a
00:44:18reasonable profit is. Eh, the definition was profits
00:44:2120% above the average of recent years, yes, but what
00:44:25happens is
00:44:27I'm not here to defend oil companies or
00:44:31companies A or B or C. Now what actually happens, for example, in the
00:44:34past decade is that oil
00:44:37companies were a bit struggling to
00:44:41pay for huge investments they
00:44:45had made to increase extraction and
00:44:48meanwhile the price of a barrel of oil was at $60, which did not
00:44:51cover the investments made, they went massively into debt, now
00:44:55they are running unduly, now and in
00:44:59fact, eh, what happens, what can be said is
00:45:02that oil companies, like any other business, are
00:45:06currently in the right place, right time, at the right moment.
00:45:10and they have a period of very favorable
00:45:13results, we have 5 minutes and Alexandre, 2 and a half minutes
00:45:17for this question, of this type of measures, no, right, right
00:45:20Rui, eh, Galp in public internal documents but
00:45:24public, at the end of last year predicted that the refining margin in 2026
00:45:27would be $5.5 per barrel, instead of
00:45:30$5 it has had a refining margin of, if I'm not mistaken,
00:45:34$16 or $17 per barrel, the same Galp
00:45:37noted that each additional dollar of refining margin
00:45:40would correspond to an additional profit of something like 70 million euros if I'm not
00:45:44mistaken, what does this mean? it means, it comes from a supply
00:45:48constraint, right, right, right, right, decrease in
00:45:51capacity,
00:45:54I already responded, I'll respond later, what I think no one understands is that in the context
00:45:58of a crisis that is affecting, in terms of cost of living, the majority of the
00:46:01population in a particularly intense way, families and SMEs, that
00:46:05there is a part of the economy and a part of society that is
00:46:09making absolutely extravagant and extraordinary profits and is not
00:46:12called upon to contribute more. It does not
00:46:14pay more taxes when it has more profits,
00:46:18but it should pay even more, that is, it is not acceptable for the rest of society,
00:46:21of course it is politically
00:46:25palm tree politics closed a series of
00:46:28refineries when we had no refinery left in the
00:46:31corporate income tax on profits, they receive that, that is not
00:46:35true, so much so that it is not true, these profits are absolutely extraordinary, much
00:46:39beyond what is necessary, a good part much beyond,
00:46:42much beyond what, much beyond what oil companies
00:46:46anticipated, much beyond what they based their
00:46:49investment decisions on, so it's not here.
00:46:54eh the companies being affected adversely,
00:46:56setting maximum
00:46:58prices, I will only say one thing, it is what is done for a long time in Madeira, in the
00:47:02Azores, it is what is done in Poland and it works, and it works,
00:47:06therefore we can look at other examples, there is a technical
00:47:09discussion, there is a technical discussion to be had about what a
00:47:12reasonable margin is, when the margin is
00:47:16speculative and all that, surely it is a discussion I cannot have, I cannot have a technical
00:47:19discussion, it means that it manages to contain prices more than in others. So if I pass a law saying
00:47:23that the price does not rise, you will evaluate the benevolence of the law because the price did not rise, are
00:47:27we really having this conversation, because if your argument is to put the price lower, you will not have
00:47:31supply, you have supply, you have supply, you have supply anyway, the argument is that,
00:47:35even setting price ceilings, you continue to have supply
00:47:37in, Galp's profits, a large
00:47:41part, most of Galp's profits have to do with increases outside
00:47:44and national action, it comes from outside,
00:47:47secondly, there has been a structural decrease in refining capacity in
00:47:51Europe, there is what... joined the
00:47:54end of, I believe it was since July, perhaps you know better than me, I think it was since
00:47:58July that Russia prohibited the export of refined
00:48:01material, so all this made the
00:48:04available refining capacity for the market decrease significantly
00:48:08and that was it, it has nothing to do with factors in Portugal properly speaking that do not move, Galp is
00:48:12a company that few Portuguese people perhaps are aware of, with a big name, isn't
00:48:15it? And that led to this state of affairs.
00:48:19Now, if Portugal were an island... if there were no
00:48:23boats or planes, like North Korea, right? A North
00:48:26Korea where whoever tried to cross could get shot, then I believe that
00:48:30some of these tools could work. But when we do this kind of
00:48:34thing, perhaps the next refinery won't be in Portugal, it will be in a country with a government
00:48:38that offers more fiscal stability guarantees. And this is the reality. We
00:48:41can want to go against reality, but the reality,
00:48:45the reality is that factors of production do not go to places that have more fiscal predictability and
00:48:48better and that better compensate capital. This measure, this
00:48:52was a measure imposed by the European Commission
00:48:55in the crisis
00:48:57of 2022.
00:49:06The report of the results of the
00:49:09conclusion
00:49:12whether it's North Korean or not, and that all companies
00:49:14have written the report they
00:49:18wrote, will read the conclusions that were will read the
00:49:20conclusions.
00:49:24Pedro jokes - to conclude, to conclude, a note that I couldn't
00:49:27make earlier when you asked if a political turnaround is good, like the IRS issue
00:49:31or others, I won't go there. Is aspirin a good thing or not?
00:49:35It depends. If it's for a headache, yes, if it's for contraception, maybe not.
00:49:38Right? So, the IRS measure is a good measure if
00:49:42we want to help the disadvantaged, obviously not,
00:49:45because half the population doesn't receive a point. Now,
00:49:48if it's to give the economy greater competitiveness,
00:49:52to think about those who want to create jobs and wealth and
00:49:55try to decriminalize the creation of wealth so that more wealth is created, let's be
00:49:59rich, of course it's a good measure, not in this context, so measures must be
00:50:03evaluated according to their purposes. Pedro jokes, Alexandre Abreu, Nuno
00:50:06Ribeiro da Silva, thank you very much for your presence, that's all, this
00:50:10program is now available on RTPlay and as a podcast, next,
00:50:13Pedro André Esteves updates all the information here
00:50:17on RTP news. We return next Monday, have an
00:50:21excellent week.
00:51:00starting from the Vasco da Gama bridge and a route to Praça do
00:51:03Comércio, follow closely the Hyundai Half Marathon of
00:51:07Lisbon, this Sunday morning live
00:51:11on FTP
00:51:13Mundo.