Increase of gasoline price may reduce bus fares, according to IBRE

Institutional
14 August 2013

Researcher at FGV's Brazilian Institute of Economics (IBRE), Samuel Pessôa, presented yesterday, August 13, a preliminary study on urban mobility during the seminar organized by Rede Nossa São Paulo. The study suggests that the increase of BRL 0.50 in the price of gasoline, originated from the Contribution for Intervention in the Economic Domain (CIDE) - the fuel tax, zeroed in 2012 -, could reduce public transportation fares in Brazil to BRL 1.20. In the simulation, the measure would cause a deflation of 0.026% in the Extended Consumer Price Index (IPCA), benefiting 78% of the population. Samuel Pessôa emphasizes, however, that these numbers are preliminary and do not consider the change in the demand due to price changes. The seminar was also attended by São Paulo's mayor and vice-president of the National Front of Mayors, Fernando Haddad. The complete survey is expected to be presented shortly by FGV.

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