ANP Announces Flexibility In Proposal To Increase Mandatory Diesel Stock Volumes Following Criticism From Fuel Companies

The Criticisms of Fuel Production Companies Regarding the Final Impact of the Proposal to Increase the Mandatory Volume of Diesel Stocks on the Prices of Derivative Products Led the ANP to Announce a Flexibility in the Project.

During last Wednesday (07/27), the director of the National Agency of Petroleum, Natural Gas and Biofuels (ANP) presented some changes to the proposal to increase the mandatory volume of diesel stocks for fuel production companies fuels. This is a strategy to address the criticisms from these companies regarding the impacts of the decision, maintaining the essence of the proposal, but with flexibility in some aspects such as the deadlines for stock verification.

Fuel Sector Companies Achieve ANP Flexibility in Their Proposal to Increase the Mandatory Volume of Diesel in Company Stocks

The ANP had announced in recent days a draft proposal regarding diesel stocks in fuel production and distribution companies, which required them to maintain the equivalent of nine days of stocks, applying only to those companies with a market share greater than 8% of S10 sales in the second half of 2021. However, after a series of criticisms from these companies, the agency reversed its stance and announced a flexibility in the proposal.

Although there is no scheduled date for the item to be back on the ANP’s board agenda, the agency has retreated somewhat on the proposals without losing the essence of the draft. Thus, the ANP aims to achieve a stock of approximately 1.54 billion liters—6.6% less than the initially targeted 1.65 billion liters—maintaining the main point of the initiative, which is the maintenance of large diesel stocks and the increase in the mandatory volume required for these fuel companies.

During the voting for the flexibility of the proposal, the rapporteur, Symone Araújo, and the director-general of the ANP, Rodolfo Saboia, expressed their favorable votes in advance, while directors Daniel Maia and Cláudio Jorge de Souza chose not to pre-announce their votes.

Furthermore, the superintendent of Distribution and Logistics at the ANP, Rubens Freitas, justified the proposal and emphasized: “We are not overburdening economic agents. We are merely stating, due to all these uncertainties, that we will remain for three more months with stocks even lower than you [companies] have been managing, as in May, for example.”

Learn About the Main Points Altered in the ANP Proposal to Increase the Mandatory Volume in Fuel Company Stocks

After the announcement of the ANP proposal, several fuel production and distribution companies in Brazil spoke out against the agency’s decision, including the largest refiners in the country (Petrobras and Acelen) and the leaders in the fuel distribution market (Vibra, Raízen, and Ipiranga).

The main justification for the opposition to the increase in stocks is that it requires extra costs in the maintenance process and could impact the final values of diesel derivatives.

Thus, the ANP relaxed the proposal and changed several points that could contribute to the acceptance of the companies. Among these is the decision that the mandatory volume of nine days of diesel stocks will have to be verified not weekly but biweekly. Additionally, the counting of fuel stocks will now also consider those on their way to the country, on ships of traders.

Finally, the trader will be able to store diesel at the distribution base, following a space lease agreement approved by the ANP. In this way, the ANP seeks to ease the criticism in the fuel sector while still maintaining its decision to increase the mandatory volume in the companies’ stocks.