Petroleum industry says, there could be a shortage of diesel in Brazil

RIO DE JANEIRO, BRAZIL – The FUP (Unique Federation of Petroleum Workers) said on Tuesday (24) that there is a risk of a diesel oil shortage in Brazil at the beginning of the second half of 2022. This is due to the expected shortage of supply on the international market and low world stockpiles.

Although the country is self-sufficient in petroleum production, it currently imports about 25% of its diesel needs for the domestic market, according to the ANP (National Agency for Petroleum, Natural Gas and Biofuels).

This is due to the low utilization of Brazilian refineries and the non-completion of important work in the sector.

Brazilian demand for the product tends to increase from June or July onwards with the increase in the agricultural harvest, greater truck traffic, and the expected resumption of consumption in the post-pandemic period.

According to Bacelar, diesel fuel supply has become a problem since sanctions against Russia changed the fuel trade.

“India produces diesel with Russian oil and exports it to Asia and Brazil. However, much of the diesel imported by Brazil, about 80%, comes from the U.S., which supplies a large amount of product to Europe,” he says.

The FUP general coordinator explains that in 2016, the Michel Temer government sought to boost fuel imports by creating private companies in the sector.

“These companies put pressure on imports and ensure that the domestic price is at international levels,” says economist Cloviomar Cararine of Dieese/FUP.

“Petrobras is in a dilemma: Either it serves its shareholders with record profits and dividends, or it lowers the refinery price, which affects prices. Bolsonaro is trying to balance between the two canoes, that of shareholders and that of Brazilian workers, who are suffering from inflation and loss of purchasing power,” says Cararine.

With information from Poder360