Falling fuel prices should help contain inflation, says professor

Virginia Parente, professor at the USP Institute of Energy and Environment, believes that the drop in gasoline prices “will have a significant impact on inflation in this and the coming months.”

In an interview with CNN Radio she explained that the measurement of inflation takes into account the value of fuels and therefore “we are going to see a cooling off” in inflationary pressures.

According to Virginia Parente, the reduction in gasoline is largely due to the fact that the northern hemisphere has entered the summer period.

“Most of the developed countries that consume oil are found, Europe, Japan, the United States, Canada, during the winter you need a lot of oil because of the need for heating; in the summer, demand drops a little, we have ups and downs in trading in relation to the war, what we are going to see is volatility.”

The specialist believes, however, that the reduction in demand will be momentary and that there are no guarantees.

“[Novas quedas] will depend. For now, there is no room to fall further, if it continues to fall abroad and the exchange rate helps, there is room for that, we have always had volatility, but associated with the war and the exchange rate, all this causes a very strong variation, we don’t know what will happen in the next few months.”

She also explained that the consumer should feel the reduction of 20 cents in gasoline sold to distributors should happen in places where there is competition.

“If we have municipalities where gas station owners are unique, perhaps the reduction will not reach, but where there is competition, it is possible that it will; in large centers, there is competition and they want to attract customers, it is possible that it will reach the end for the consumer”.