Loyalty To Fuel Brands At Gas Stations Will End And Fuel Sales Via Delivery Will Be Allowed; Measure Promises To Lower Gas Prices By Stimulating Competition

End Of Brand Loyalty At Gas Stations Advocated By ANP Promises To End Cartel, Stimulate Competition And Lower Gasoline Prices, Which Have Seen Consecutive Spikes

On this day (7/7), the ANP held a Public Hearing No. 07/2021 regarding the draft resolution that alters the regulatory framework for retail fuel resale in Brazil. The agency’s idea is to end brand loyalty at gas stations and authorize fuel sales via delivery. The new measure promises to stimulate competition, and the price of gasoline per liter may decrease by up to 50 cents, easing the burden on Brazilians.

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The event was held via videoconference, with live broadcast on ANP’s YouTube channel. The proposal for revision also aims to reduce the burden on the economic agents operating in the fuel market, enable innovation through new ways of operating, stimulate supply by promoting new business arrangements, as well as review and simplify rules that have become disproportionate, without neglecting the defense of consumers’ interests.

Among the topics discussed are: regulatory oversight of brand loyalty; supply outside authorized resale facilities; the possibility of cancellation of operating authorization due to the removal of interdiction seals; and how prices are displayed on panels and measuring pumps.

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See more information about the proposal at this link. Also access the page for Public Consultation And Hearings No. 07/2021:

Brand loyalty for gasoline would become a consumer choice, rather than a regulatory obligation that currently assigns the ANP the role of supervising private contracts.

According to the agency, the goal is “to enable innovation through new ways of operating, stimulate supply by promoting new business arrangements, as well as reviewing and simplifying rules that have become disproportionate, without neglecting consumers’ interests.”

The flexibilization of the “regulatory oversight of brand loyalty” refers to the obligation for reselling gas stations that have opted to display a fuel distributor’s commercial brand to only acquire, store, and sell fuel supplied by that distributor.

ANP Advocates For The End Of Brand Loyalty At Gas Stations And Delivery Service

The National Agency of Petroleum, Gas, and Biofuels advocates for the commercialization of different brands at the same gas station, relaxing the “regulatory oversight of brand loyalty.”

In addition, the Agency seeks a new way of operating in resale that allows for delivery outside the gas station’s premises through a delivery service. The draft resolution will be submitted for public consultation and hearings.

Among the aforementioned proposals, the ANP also advocates for the elimination of the use of the third decimal place in fuel price tables. The objective, according to the agency, is to bring greater clarity in price presentation to Brazilians.

New Measure Could Reduce Gasoline Prices By Up To 50 Cents

The Government believes that the measure will stimulate competition among brands and could reduce gasoline prices by up to R$ 0.50 per liter. However, there are distributors who oppose the measure, claiming they invest in gas stations and that the measure would benefit companies operating irregularly, whether through tax evasion or selling low-quality products.

The delivery system for gasoline outside the gas station, which has already been tested in Rio de Janeiro by GOfit, is also causing controversy.

The Gofit service operates through a mobile app, following the example of food delivery services such as Rappi and Uber Eats: after registering, an adapted vehicle delivers the fuel from the gas station to the requested address.

This service, already provided in other countries where competition benefits consumers, is not welcomed by distributors and gas stations in Brazil. They claim that the operations can pose a risk to supply if safety rules are not respected.

Direct Sale Of Ethanol From Mills Approved By CCJ Promises To Stimulate Competition And Curb Price Increases Of Gasoline At Gas Stations

On May 5, the Constitution and Justice Commission (CCJ) of the Chamber of Deputies approved the permission for the direct sale of ethanol from mills – without passing through distributors – to gas stations. The new measure could curb the rise in gasoline and diesel prices and ease the financial burden on Brazilians.

It is still unclear how much the direct sale of ethanol will impact the price of the biofuel in Brazil, since there is a strong dependence on industrial logistics in each state. However, a 2019 study by Esalq-Log showed that the average cost of transporting ethanol in São Paulo state would decrease by about 30% with direct sales.

There are also estimates that concentrating production and distribution margins with the producer and increasing competition among mill operators and distributors in the market could reduce the prices of hydrated ethanol for the final consumer by up to 20 cents per liter.

“The great gain is the appreciation of renewable fuel. It will have more competitiveness compared to fossil fuel, gasoline, and will be more appealing for consumers to refuel,” points out Sévero.