2023-08-11 23:50:03
By Rodrigo Viga Gaier and Marta Nogueira
RIO DE JANEIRO (Reuters) – The Minister of Mines and Energy, Alexandre Silveira, said on Friday that there is no risk of fuel shortages in Brazil, after market agents pointed out in recent days specific restrictions on the supply of products by distributors in different states of the country.
The minister made the comment when asked about the current supply scenario, which would be impacted by a decision by Petrobras to keep diesel and gasoline prices below those practiced in the international market, according to market representatives.
The oil company’s movement would be discouraging imports by third parties, according to market representatives interviewed by Reuters. Brazil imports about a quarter of what is needed to meet demand.
Industry sources, however, say that there is no shortage of product on the market.
“I’m absolutely convinced that it won’t (there’s going to be a shortage of fuel)”, Silveira told journalists, adding that Petrobras has “autonomy and independence” to set its prices and that the company has already informed the government that it would make readjustments if necessary in view of a rise in oil price.
Petrobras answered requests for the supply of diesel made by distributors in August and requests for September are being negotiated, said this week the director of Logistics, Commercialization and Markets of the company, Claudio Schlosser, ruling out risks for supply.
In a note to clients this Friday, Goldman Sachs analysts said they believed that Petrobras “may be about to increase the price of fuel in Brazil, especially to keep the market balanced and avoid fuel shortages in Brazil, mainly on the diesel, given that around 25% of supply comes from imports”.
Goldman analysts also stated that Petrobras management representatives said the day before in a meeting with investors that the company remains profitable with current prices and, therefore, sees less need to adjust quotations from that perspective.
The scenario takes place after the oil company adopted a new commercial strategy this year, which stopped following only import parity and started to consider other variables, such as the customer’s alternative cost, seeking to be as competitive as possible.
StoneX consultancy calculations show that Petrobras’ diesel would currently need a 37.7% readjustment to be on par with the international market, while the company’s gasoline would need a 24.3% increase.
“We are indeed having some restrictions. Petrobras’ lag has discouraged the purchase of imported products for these regions, which are reporting shortages,” said StoneX’s risk management consultancy in a note, reiterating that Petrobras’ refining capacity is not is enough to meet the entire Brazilian demand for fuel.
The oil company reached an average utilization factor (FUT) of its refining park of 93% in the second quarter, the highest level since the third quarter of 2015, and signaled that it could further raise the indicator to above 95%. The company has been breaking monthly production records for S-10 diesel.
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Fecombustíveis, a federation that represents around 40,000 fuel stations in the country, confirmed this Friday that distributors are restricting products in several points throughout Brazil, but stressed that there is no shortage.
The Brasilcom Federation, which brings together more than 40 regional fuel distributors installed in almost all Brazilian states, stated in a note that “there is no news of diesel shortages, only information on occasional and localized shortages, but all remedied and supplied within the quotas of the day”.
The president of the Brazilian Association of Fuel Importers (Abicom), Sergio Araujo, stated that Petrobras is not doing anything different from what it promised, holding back adjustments for longer. But he pointed out that the company needs to provide predictability to the market, so that agents can position themselves so that there is no shortage of product.
Despite warnings from members of the sector, fuel prices at gas stations are relatively well behaved.
Diesel S-10 accumulated an increase of almost 1% in the first ten days of August at Brazilian service stations, to an average of 5.17 reais per liter, reversing a recent downward trend, pointed out this Friday the Ticket Log Price Index ( IPTL)
Sought, the oil sector regulator ANP said that at the moment there are no reports regarding the reduction in the national or international supply of diesel, nor were problems related to the lack of diesel oil, gasoline or any other product reported to the agency.
“Diesel stocks are at satisfactory levels, sufficient for internal demand. Imports complement the internal supply of the product”, stated the autarchy.
(By Rodrigo Viga Gaier and Marta Nogueira)
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