RIO DE JANEIRO, BRAZIL – The debates about the risk of diesel shortage in Brazil gained a new escalation last week, raising questions about its real possibility and its scope.
Since the country is continental in size and has a transportation matrix mainly based on roads, the logistical dependence on diesel is significant.
Specialists interviewed by Poder360 affirm that 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.
These percentages already account for imports by the companies. Acelen operates the Mataripe refinery in Bahia state, bought from Petrobras in December 2021.
Petrobras itself is also the main responsible for importing the product. According to the ANP, the company’s shares of the total diesel imported were:
- 2018 – 27.4%;
- 2019 – 31.7%;
- 2020 (year of the pandemic) – 7.4%;
- 2021 – 46.9%;
- 2022 (until April) – 35.4%.
Petrobras does not intend to increase the level of diesel imports this year. Thus, it will be up to other importers to cope with an eventual increase in demand.
Since the Brazilian oil company has still maintained the price of diesel below the average in the international market, there is a fear in the market that importing companies have no interest in supplying Brazil.
Petrobras has been working at its maximum refining capacity. Besides this, for 2022, it has more scheduled maintenance for its refineries than in 2021.
Last year, the company made 22 shutdowns. For this year, 25 shutdowns are planned, which will cost about R$2.5 billion (US$524 million) and involve around 4,500 pieces of equipment.
In an attempt to calm rumors about a possible shortage of the product, on May 27, the Ministry of Mines and Energy released a note stating that, even if imports were interrupted, the country would have enough stock to meet the demand for 38 days.
However, the government’s evaluation may be underestimated because two reports published this year by the EPE (Energy Research Company) indicate a demand for diesel below that which has been verified in the country, according to data from the ANP.
Historically, the diesel demand in the country is usually divided in:
- 1st semester – 47% of the total volume;
- 2nd semester – 53%.
It is the second semester that sector specialists have been most concerned about. The embargoes of several countries on oil and derivatives from Russia tend to intensify in the coming months.
As gas supply is also scarce globally, European countries should demand more diesel from Europe to supply thermoelectric plants.
At the same time, Brazil expects higher demand for diesel because of agribusiness due to the projected increase in harvests. This scenario leads to a greater dispute for diesel from the United States, from which Brazil imports the most.
The alternative suppliers would be Asian countries, which, for being more distant, have longer sea freight terms than those from the Gulf of Mexico, in the USA, to Brazil, of about 30 days.
Even so, specialists in fuel distribution say that the risk of shortages is in places farther away from the regions with refineries or ports that receive imported diesel. States in the North, for example, would be among the most vulnerable.
Amidst the discussions on avoiding a shortage, the Parliamentary Mixed Front for Biodiesel has been the main interlocutor between the sector and the Minister of Mines and Energy, Adolfo Sachsida, to convince him of the increase from 10% to 12% in the mixture of biofuel in diesel.
The measure would reduce the pressure on diesel A (pure), with scarce supply worldwide.
Biodiesel producers say that, although the price of biodiesel is higher, an eventual lack of supply would be much more expensive for the country.
They affirm that if the mixture is increased to 12%, the impact on final diesel prices per liter would be R$0.06 more considering the importers’ price to whom Brazil will have to resort, and another R$0.15 if only the price charged by Petrobras is considered.
The decision is up to the CNPE (National Energy Policy Council), presided over by the Ministry of Mines and Energy (MME). If the Council decides to change, the industry claims to have the capacity to meet the increase, delivering the new volumes to distributors within 30 days.
Poder360 contacted Petrobras and the MME. The state-run company said diesel inventories are the lowest in the last ten years and that the second semester will be challenging for Brazil. Read below the complete note sent by Petrobras. The MME informed that it would not comment.
PETROBRAS’ NOTE
“Petrobras contributes to fuel supply planning in Brazil, considering the domestic and international market scenarios.
“Today, inventories in the main diesel markets are the lowest in the last ten years due mainly to the war between Russia and Ukraine.
“In Brazil, there is a challenging situation in the second half of the year, since it is agricultural harvest season and consumption increases for transporting the crop.
“In the southern hemisphere, winter starts, and demand for home heating. In addition, the hurricane season can impact production.
“For these reasons, the price balance with the international market is fundamental to guarantee the importation that today meets about 27% of Brazilian consumption.”
With information from Poder360
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