Single Federation of Oil Workers (FUP) Warns of Diesel Supply Shortage in Brazil Due to Decline in International Market Supply and Low Refinery Utilization for Fuel Production

Written by Ruth Rodrigues

Published on 27/05/2022 at 12:03

Foto: Diário do Transporte

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With a Low Use of Brazilian Oil Refineries for Diesel Production and a Risk of Shortage in the International Market Due to a Decline in Fuel Supply, the FUP Foresees a Crisis of the Resource in the National Territory

The National Federation of Oil Workers (FUP) stated on Tuesday (05/24) that Brazil faces a risk of a diesel shortage at the beginning of the second half of the year. This is due to the international market having a low supply of the fuel, and Brazilian oil refineries are not focused on producing the resource, which will contribute to a possible crisis in the national territory and an increase in oil prices.

“Brazil is at risk of a diesel shortage,” warned Deyvid Bacelar from the National Federation of Oil Workers (FUP).
The global scarcity of fuel could have less impact in the country if Petrobras had not reduced its investments in refining.https://t.co/ImVXLmJxBZ pic.twitter.com/ggD2L8Mohu

— Brasil de Fato (@brasildefato) May 25, 2022

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Brazil Faces a Risk of Fuel Shortage at the Beginning of the Second Half of 2022, According to FUP Projections for the National Market

The FUP issued a warning earlier this week regarding the future of the fuel market in Brazil during the second half of 2022, as the federation projects a diesel shortage as early as the beginning of the period. This is because the international market currently has a low fuel stock, leading to a decline in the supply of the resource for other nations, including Brazil.

Currently, Brazil meets all its oil needs with domestic production, but the country currently imports about 25% of its diesel needs in the domestic market, according to ANP (National Agency of Oil, Natural Gas and Biofuels).

This happens because Brazilian oil refineries do not invest in fuel production, and therefore the country needs to make large diesel imports. Thus, the national market cannot prepare for international crisis moments like the one the FUP is predicting.

Moreover, there will be an increase in demand in the coming months, as, with the agricultural harvest increasing, more trucks circulating, and the expectation of a resumption of consumption in the post-pandemic period, Brazil needs more diesel stocks. However, the international market is currently experiencing a low-stock situation and may face a shortage of fuel, which will also reach the national territory and many other countries around the world.

Dependence on Diesel Imports in Brazil Reveals a Problem in Fuel Supply and the Utilization of National Refineries for Good Productivity

With a crisis and diesel shortage looming over Brazil in the coming months, the FUP stated that this moment reveals the fragility of the fuel production system in the country. Additionally, it demonstrates the shortcomings of the Bolsonaro government policy, which did not create new refineries, reduced investments in the refining sector, and sold Petrobras units.

Brazil has a high potential for diesel production and, with the necessary investments, could be self-sufficient in internal supply, but it still lacks the necessary focus for this to happen.

Furthermore, the FUP’s general coordinator, Deyvid Bacelar, revealed another problem in the national supply chain with the international conflicts between Russia and Ukraine and highlighted: “India is producing diesel with Russian oil and exporting it to Asia and Brazil. However, a large portion of the diesel imported by Brazil, about 80%, is supplied by the U.S., which is sending a lot of product to Europe.”

As a result, importing the fuel becomes increasingly difficult in the current scenario and is even worse in the future projections made by the FUP. Thus, the federation now anticipates new statements from the ANP and the Federal Government regarding measures to prevent a shortage of the resource in the country during the next semester.

Single Federation of Oil Workers (FUP) Warns of Diesel Supply Shortage in Brazil Due to Decline in International Market Supply and Low Refinery Utilization for Fuel Production

With a Low Use of Brazilian Oil Refineries for Diesel Production and a Risk of Shortage in the International Market Due to a Decline in Fuel Supply, the FUP Foresees a Crisis of the Resource in the National Territory

Brazil Faces a Risk of Fuel Shortage at the Beginning of the Second Half of 2022, According to FUP Projections for the National Market

Dependence on Diesel Imports in Brazil Reveals a Problem in Fuel Supply and the Utilization of National Refineries for Good Productivity

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Single Federation of Oil Workers (FUP) Warns of Diesel Supply Shortage in Brazil Due to Decline in International Market Supply and Low Refinery Utilization for Fuel Production

With a Low Use of Brazilian Oil Refineries for Diesel Production and a Risk of Shortage in the International Market Due to a Decline in Fuel Supply, the FUP Foresees a Crisis of the Resource in the National Territory

Brazil Faces a Risk of Fuel Shortage at the Beginning of the Second Half of 2022, According to FUP Projections for the National Market

Dependence on Diesel Imports in Brazil Reveals a Problem in Fuel Supply and the Utilization of National Refineries for Good Productivity

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The Blood Falls of Antarctica hide a living ecosystem trapped under the ice for over 2 million years, where microbes survive without light, without oxygen, and without ever having seen the Sun.

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