The general coordinator of the Unique Federation of Oil Workers (FUP), Deyvid Bacelar, took to twitter this Wednesday (25) to make an alert: “Brazil is at risk of diesel shortages at the beginning of the second semester.”
According to Bacelar, the problem stems from the shortage of fuel in the international market and the low level of world stocks. It could affect Brazil precisely when truck drivers are mobilized to ship the grain harvest to ports, a period of higher diesel consumption.
Brazil runs the risk of running out of diesel oil at the beginning of the second half of this year, due to the expected shortage of supply in the international market and the low level of world stocks.
– David Bacelar (@deyvidbacelar) May 25, 2022
Bacelar said that such shortage is related to the war between Russia and Ukraine. He recalled, however, that Brazil could be immune to this effect of the conflict since it is self-sufficient in the production of oil, the raw material for diesel, and had the necessary refineries designed to transform oil into fuel.
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It turns out that everything has changed since Lava Jato and the coup that ousted then-President Dilma Rousseff (PT) in 2016.
After Dilma’s impeachment, during the term of President Michel Temer (MDB), Petrobras decided to reduce its investments in refining. It also adopted a pricing policy to increase its profitability and make room for importers to expand their share of the domestic fuel market.
This, in fact, occurred. In 2021, Petrobras obtained the biggest profit in its history: R$ 106 billion. On the other hand, its share in the Brazilian diesel market was also never the same, benefiting multinational importers.
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In 2016, Petrobras supplied 77% of the country’s truck fleet with its fuel. In 2017, the percentage dropped to 67%. It recovered from 2017. In 2021, however, it was still at 74% – that is, below the level of six years ago and well below what it could have been if investments had not been interrupted.
“The work on the Abreu e Lima Refinery (Rnest), in Pernambuco, was stopped halfway through due to Lava Jato. We had refineries planned for Ceará and Maranhão. The Rio de Janeiro Petrochemical Complex (Comperj) also stopped”, listed economist Cloviomar Cararine Pereira, from the Inter-union Department of Statistics and Socioeconomic Studies (Dieese). “All of them would be focused on diesel production.”
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“Lava Jato prohibited Petrobras from contracting large national companies to complete these works”, added Bacelar, from FUP. “We would have been able to meet our demand if this had not occurred.”
Data from the National Petroleum Agency (ANP) indicate that about 20% of the diesel consumed in Brazil today is imported. This means that the country is today partially vulnerable to international supply crises, such as the one caused by the war.
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Furthermore, it also means that if importers stop bringing diesel to Brazil by a unilateral decision, the risk of shortages would become a reality. And companies in the industry, which only gained relevance due to decisions taken by the government and Petrobras, know this.
Today, they even use this dependence to pressure the government itself against a change in Petrobras’ pricing policy and a reduction in diesel, for example. They argue that if the government decouples the price of fuel from the dollar, it would be impossible for them to import what is necessary to supply the country’s demand. Taking this into account, the government says that Petrobras cannot change its prices.
“It’s a nanny [jogo de futebol] agreed”, said Bacelar, in an interview with Brazil de facto. “Importers ask for the maintenance of high prices to guarantee supply. The government keeps prices high to ensure profit for importers and Petrobras shareholders.”
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Petrobras supports importers
In early May, when Petrobras’ board met with investors to present the company’s earnings during the first quarter of the year, the risk of supplying diesel in Brazil was discussed. At the time, the company’s board stated that the issue was sensitive because the world stocks of the product were really low.
During the conference, the then president of the company José Mauro Coelho – fired by President Jair Bolsonaro (PL) last Monday after staying in office for just over a month – said that Petrobras would maintain its pricing policy to guarantee the supply of the National market.
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Bolsonaro has publicly complained about prices, but has not yet taken concrete action to get Petrobras, which is controlled by the government, to lower gasoline and diesel.
This Wednesday (25), the company’s board of directors met to, among other things, discuss the so-called import price parity (PPI). There has still been no sign that this policy will be changed, despite requests from various sectors of the population.
“Petrobras’ pricing policy is crushing the middle class and making the poor poorer and poorer,” said Wallace Landim, aka Chorão, truck driver and president of the Brazilian Association of Motor Vehicle Drivers (Abrava).
Editing: Felipe Mendes