Brazil wants to buy Russian diesel after Bolsonaro talks with Putin

RIO DE JANEIRO, BRAZIL –  President Jair Bolsonaro told his supporters Monday (27) that he had spoken with Russian President Vladimir Putin about trade exchanges between the two countries and the possibility of buying diesel from Russia.

“We have food security and energy security there. So there is a possibility that we will buy diesel from there. It will certainly have a lower price,” the president said.

During a ceremony at the Planalto Palace, Bolsonaro mentioned the Putin connection and said Brazil would address food and energy insecurity. However, the president said only that he had discussed the fertilizer trade with the Russian leader.

In a statement released by the Kremlin, Putin confirmed the phone conversation about global food security.

The Russian president told Bolsonaro that he was committed to fulfilling his obligations to ensure uninterrupted supplies of Russian fertilizer to Brazilian agriculture.

Russia is among the world’s leading producers of this commodity. Bolsonaro said fertilizer supplies were “guaranteed” until early 2023.

Fertilizer dependence is a key factor in Bolsonaro’s neutral stance on Russia’s war against Ukraine. “We are taking a position of balance on this contradictory issue because, without fertilizer, we cannot survive,” Bolsonaro said on April 27 at an event in Brasilia.

Putin and Bolsonaro have strengthened their ties since the Brazilian leader visited Russia in February this year.

RISK OF DIESEL SHORTAGE IN BRAZIL

Since Brazil is continental in size and has a transportation matrix mainly based on roads, the logistical dependence on diesel is significant.

The risk of a shortage exists, but not on a national scale. According to CNT (National Transport Confederation), almost 65% of cargo transportation in Brazil is done by road.

According to the Ilos consulting company, which specializes in logistics, the participation of roads in other countries with continental dimensions is usually much lower. For example, in the United States and China, it is 43% and 35%, respectively.

Brazil is not self-sufficient in fuel. According to the ANP (National Agency of Petroleum, Natural Gas, and Biofuels), the proportions of dependence on imports in the last five years were, on average:

2018 – 21.6%;
2019 – 25.5%;
2020 (pandemic year) – 23%;
2021 – 26.6%;
2022 (until April) – 25.9%.

The leading domestic suppliers of diesel A (pure) are Petrobras and Acelen, which until April of this year accounted for 81% and 9.3% of the volumes delivered, respectively.