Brazil's ANP Approves Rules for Federal Diesel Subsidy Program

The board of Brazil's National Agency of Petroleum, Natural Gas and Biofuels (ANP) approved on Friday, the 27th, the methodology for defining the reference price of the federal government's diesel subsidy program. This program is set to take effect following its publication in the Official Gazette of the Union. According to the ANP, the reference price will be regionalized, denominated in Brazilian Reais per liter, and updated daily. Its calculation will consider various price formation components and parameters of the road diesel market. The directors also approved a roadmap outlining basic guidelines for interested producers, importers, and distributors wishing to apply for the program. The plan provides for a reimbursement of up to R$0.32 per liter of diesel to economic agents, based on their practiced prices and the parameters defined by the government for each period. The initial period of the program covers March 12 to March 31. To receive the subsidy, companies will be required to sell diesel at a price equal to or below the maximum value established by the program. In the preceding week, the Ministry of Mines and Energy (MME) issued an ordinance that set the commercialization prices for diesel for the first period of the subsidy. Starting from subsequent periods—most of which will last 30 days until the end of the year—the maximum selling price will be calculated based on the reference price defined by the ANP on the first day of each period.