Brazil: Market Warns of Fuel Supply Risks After Petrobras Cancels Auctions

Petrobras's decision to cancel gasoline and diesel auctions this week has triggered a red alert across the market. Distributors and market sources have highlighted potential risks to the national fuel supply, citing an unclear inventory situation and limited time for imports. The National Union of Fuel and Lubricant Distributors (Sindicom), which represents major players like Vibra, Raízen, and Ipiranga, has sent an official letter to the government and the National Agency of Petroleum, Natural Gas, and Biofuels (ANP) regarding “risks to national supply.” The association urged for measures to be taken to ensure Petrobras resumes its fuel auctions. In the document, dated the previous day, Sindicom stated that its member distributors have observed a significant increase in product demand. However, they reported cuts in supply quotas and rejections of additional orders from Petrobras during March and April. Sindicom noted in a statement, “The global scenario is undergoing one of the most severe shocks in recent history, driving up prices and intensifying the international competition for supplies.” This refers to the impacts of the war in the Persian Gulf, which has damaged oil sector infrastructure and increased prices due to transport disruptions in the Strait of Hormuz. The statement further added, “Domestically, the absence of clear guidelines in pricing policy and the uncertainty regarding Petrobras’s ability to fully meet orders, combined with…”