The rise in diesel prices and the weakening of the real against the dollar in the last few weeks have accentuated concerns about the gap between fuel prices defined by Petrobras and the international parity. The state-run company has not adjusted the prices of diesel and gasoline in Brazil for 55 days, which has hindered imports by other agents. The scenario leads to discussions about the risks of shortages in the fuel market. The main concern of the market is diesel. Sources in the sector, however, rule out the risk of a systemic and generalized shortage, although supply may face problems in some regions.
As the prices gap widened, imports by regional distributors and smaller importers fell. Thus, the biggest distributors and Petrobras itself have been responsible for supplying the market, which are still importing. Some regions have faced greater difficulty in meeting the total demand by smaller distributors. According to sources, the issues are registered in Vitória (Espírito Santo), which is supplied by short-sea shipping, some cities in Goiás and Minas Gerais and places in the Northeast regions.
“What happens is that on a given day a gas station or a consumer can run out of product, or no longer be served by the distributor that normally serves them and start being supplied by some other,” said Sérgio Araújo, head of the Brazilian Association of Fuel Importers (Abicom).
Sources linked to major distributors say that occasional supply problems have occurred mainly at service stations that do not have supply loyalty agreements. The large distributors have managed to maintain imports and make an average, in the final prices, between the costs of fuel purchases at Petrobras’s refineries and purchases abroad. “Although with less surplus, the volumes always meet the demand,” said an executive who asked not to be named.
A reduction in the demand for diesel in the domestic market in recent weeks, due to seasonal factors, has also helped to stave off supply problems, sources said. Valeria Lima, head of downstream at the Brazilian Petroleum Institute (IBP), said that there is no risk of shortage, but the market is “very small.” Carla Ferreira, an analyst with the Institute in Strategic Studies of Petroleum, Natural Gas and Biofuels (Ineep), says that specific problems may require a reorganization of players.
There are also reports that some customers of the Mataripe refinery (Bahia) are no longer buying products from the refinery, in search of better prices in units operated by Petrobras in other states of the Northest region, such as the Abreu e Lima Refinery (Rnest), in Pernambuco. The Mataripe refinery was privatized at the end of last year and is currently operated by Mubadala’s Acelen.
The distance of almost 800 kilometers between Acelen’s refineries and Petrobras’s units has been covered by trucks from clients seeking the lower prices charged by the state-owned company, especially in this first week of May, sources say. “If the gap in prices is maintained, there is no doubt that this inversion of logistic flows will be accentuated,” says a source, who points out, however, that there are limits to this type of operation, since Rnest itself is not capable of meeting all consumption in the Northeast region.
The production of the national refineries cannot supply the entire demand in Brazil. According to data from the National Petroleum Agency (ANP), in March, Brazil imported 23.7% of the diesel consumed in the country. Of the imported volume, 46% was brought into the country by Petrobras itself and 54% by other companies. In the same month, considering the supply by local refineries, Petrobras was responsible for delivering 82% of the diesel consumed in the country to the distributors, and the Mataripe Refinery, for 9.7%, with the remainder coming from smaller companies.
According to Marcus D’Elia, the managing partner of the consulting firm Leggio, Petrobras has sought to increase the utilization of its own refineries, which has exceeded 90% in recent months. “This puts a little more product on the market, but does not solve the difference between demand and supply, which is structural. Today, effectively maintaining the country’s supply depends on imports, which are discouraged with a gap between fuel prices. Imports continue to occur, but, in a structural way, in the medium and long term this will always embed a risk,” he said.
The most acute situation occurs with diesel, a fuel sold by Petrobras to distributors with a difference of 26% in relation to international prices, according to calculations by consultancy StoneX. Abicom, on the other hand, calculates that the diesel price has an average difference of 24% in relation to international prices. Specialists explain that the international market is going through an unusual moment, in which the price of diesel has skyrocketed in relation to oil prices. “We are living an atypical moment, due to the variation in world demand, logistic issues and the variation in the level of stocks,” said Mr. Araújo, with Abicom.
In the case of gasoline, Ativa Investimentos points out that the gap between prices went to 19.1% on Wednesday from 14.9% on Friday. StoneX estimates that the gasoline sold by Petrobras is 6%, on average, below international prices, and Abicom calculates that prices are 12% below international prices, requiring an increase of R$0.54 a liter, on average.
Petrobras’s last adjustment was made on March 11, when the company raised diesel prices by 24.9%, and gasoline prices by 18.7%, in addition to a 16% increase in liquefied petroleum gas (LPG).
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Since then, President Jair Bolsonaro’s dissatisfaction with price increases led to a change of command in the state-owned company, with the replacement of CEO Joaquim Silva e Luna by José Mauro Coelho on April 14.
Sources linked to Petrobras say that the company is unlikely to pass on the current price gap immediately to consumers. “Petrobras follows the policy of parity regarding the average prices over the last 12 months, it is normal to have periods in which the gap is wider. This month, due to the volatility of the exchange rate, there was an escalation,” said Ilan Arbetman, an analyst at Ativa Investimentos.
The government has been monitoring the situation. In a virtual event on Tuesday, the deputy executive secretary of the Ministry of Mines and Energy (MME), Pietro Mendes, said that, in the case of diesel, a monitoring desk was created to collect information from distributors. He ruled out supply problems in May.
“The government needs a plan for this kind of situation. It is not just a question of price policy, but of guaranteeing supply,” said Edmar Almeida, a professor at the Energy Institute at the Pontifical Catholic University in Rio (PUC-Rio).
In a note, Petrobras said that the sales prices seek a balance with the international market, following the upward and downward variations, but avoiding immediately passing on to prices the external volatility and changes in the exchange rate caused by broader factors. “Pricing decisions are based on technical and independent analyses based on the external and internal scenarios of the oil and oil products market, and there is no interference from the calendar of disclosure of results.”
Source: Valor International