Brazil considers new oil royalties distribution

Brazilian Finance Minister Guido Mantega said Thursday that the government is considering a new distribution of the country's oil royalties. The government wants to set up a distribution system, which satisfies both oil-producing and non-producing states. Mantega said the non-producing states, already to receive more royalties from the new oil fields, are also asking for more concessions in the operative ones. "We have some understanding towards a proposal which takes everyone into consideration," he said. "We must proceed with caution, so we do not take from this or that state more than we can." Under the current distribution rules, oil-producing states get a much higher share of royalties than non-producing states. The latter have complained that this is both unfair and violates the Constitution, as oil and other natural resources belong to the Union. However, oil-producing states said they should receive more royalties since the Constitution has provided compensations for the non-producing states. Mantega stressed that the proposals must be made responsibly enough to ensure the country's fiscal stability.