Petrobras limits fuel delivery to distributors for the 2nd month

Petrobras sees a new “atypical demand” by Brazilian fuel distributors and has already announced to the market that it will not meet all orders for product delivery in December, as was the case in November.

Sector executives, once again, warn of the risk of shortages if the prices charged by the state-owned company in its refineries do not justify the importation, by private companies, of more expensive products abroad.

Petrobras claims that orders have been larger than usual and argues that there are other companies in Brazil authorized to import the products. Due to a lack of production capacity, between 20% and 25% of the Brazilian diesel market is supplied by imports.

“As in the month of November, diesel orders sent by distributors for the month of December were atypical and higher than the market expected for this period,” said the state-owned company, in a note.

Photo: Tomaz Silva/Agência Brasil

“After an availability assessment, considering our production and supply capacity, the volume accepted was lower than the orders received”, added the company, which says that “market service remains normal, with no news of shortages”.

Petrobras has not readjusted gasoline and diesel prices for a month. According to market projections, the latest increases were not enough to cover the entire gap in relation to the international price, in a sign that the state-owned company has been working with a lower price level.

In the case of gasoline, there would be room for a 6% readjustment, according to the most recent projection by the chief economist of Ativa, Étore Sanchez. He does not rule out, however, a reduction in prices, if the hypothesis that the company admits to working at a discount is correct.

The difference between domestic prices and international quotations is a reason for concern in the oil sector, as the obligation to import more expensive products is transferred to private companies due to cuts in delivery orders by refineries.

In October, the IBP (Brazilian Institute of Oil and Gas) stated that without a clear perception that prices will follow market rules, there is no security for investments or imports that complement the internal deficit of derivatives.

“The alignment of prices with the international market presents itself as the necessary approach to guarantee market supply at the lowest costs for the population”, said the institute, which brings together the large oil companies and fuel distributors operating in the country, including the institute itself. Petrobras.

Petrobras has been repeating that it has increased production at its refineries, but a portion of the market will continue to be served by imports. Currently, the company says, refineries are operating at 87% of their capacity.

This Tuesday (23), in an unprecedented alliance, the United States and other countries, including China, announced that they will use their strategic oil reserves to try to bring about a drop in the prices of this commodity.

President Joe Biden said today that he had ordered the release of 50 million barrels of oil from US strategic reserves. “This decision will be taken in parallel with other nations that have significant energy consumption,” said the White House.

The announcement, however, did not have an immediate effect on international quotes. Brent oil, traded in London, closed the session up 3.2%, at US$ 82.31 (R$ 458) per barrel.

In a hearing at the Chamber of Deputies, the president of Petrobras, Joaquim Silva e Luna, said that “it is not correct” to attribute the increase in fuel prices to Petrobras, claiming that there is no monopoly in the sector and that the company follows market prices .

“Petrobras readjusts the price of these fuels observing these variables: foreign market, domestic market, how they behave, we observe practically three large markets – the United States, Europe and Asia – the competition between producers and importers, and the variation of the price on the world market”, he argued.

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