Petrobras Price Adjustment Key to Solving Fuel Supply Issues, Say Industry Sources

According to Reuters, various sources within Brazil's distribution sector indicate that the solution to the current crisis of restricted fuel supply in Brazil lies in a price adjustment by Petrobras. This move would reopen an import window, providing more market players with the security to bring products from abroad and remunerate their activities. “As long as Petrobras does not equalize its prices with those of imported products and continues its practice of not fulfilling additional orders and suspending auctions – even if these auctions sometimes negotiate products at up to 2.50 reais per liter above the list price – the situation tends to worsen,” said an anonymous industry source. Petrobras's production accounts for over 50% of the country's diesel consumption, with approximately 20% coming from private refineries and the remainder from imports carried out by a range of companies, both large and small, including the state-owned company itself. Therefore, experts consulted emphasize the importance of aligning domestic prices, which are more than 70% behind international product prices, to enable external purchases and resume auctions, which include products imported by Petrobras. The National Agency of Petroleum, Natural Gas and Biofuels (ANP) has requested that Petrobras resume fuel auctions, which were suddenly interrupted earlier this week, following a request from Sindicom, the National Union of Fuel and Lubricant Distribution Companies, which represents companies like Raízen.