Brazil: how to deal with the increase in energy costs?
Last week's news showed, intensively, how electricity prices "exploded" a lot and even "helped" to boost inflation in Brazil.
A surprise?
Our official "framework" is centred on "cost sharing" and not on "cost meritocracy". The way the country uses to increase supply is unfortunately not based on competitiveness.
A list of "crony" projects, much more expensive than alternatives, are officially approved - they are "encouraged" by interested groups. And, without ceremony, the associated extra costs are "shared" so that everyone pays.
The same occurs with many subsidies. Which in practice transfer bonuses to those who "collect" them, and the burden will be charged to "all other" consumers.
An essentially losing model. And worst of all, the prevailing tendency is to continue like this. We will continue to be at the tail end of the BRICS (Brazil, Russia, India, China and South Africa) in $/kWh, as we have been "positioned" for years!