Petrobras Fails to Meet 10% of Diesel Orders for May, Sources Say

Petrobras has once again failed to fully meet diesel orders from major distributors, this time for deliveries scheduled in May. Two sources familiar with the matter stated that the state-owned oil company is seeking to avoid importing fuel amidst high international market prices. The shortfall is approximately 10% of the volume demanded by distributors, according to two sources from different companies, who spoke on condition of anonymity. Distributors' orders are based on deals made with Petrobras over the past three months and adjusted during the subsequent period. In April, the state company had previously denied 20% of companies' quotas, market sources had reported earlier. When contacted, Petrobras did not immediately comment on the matter. However, two company insiders with knowledge of the situation indicated that large distributors might be requesting volumes exceeding actual demand, aiming to gain market share from smaller companies. Brazil's diesel sector, the most traded fuel in the country, has been facing tension since the onset of the conflict, as Brazil imports approximately 25% of its demand. Petrobras, the largest local producer, is also responsible for a portion of these imports. To curb price hikes caused by the Middle East conflict, the government has launched a subsidy program among other measures. One source noted that distributors are accustomed to these so-called 'cuts' in their quotas, as Petrobras's contract allows for such adjustments.