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Fogás warns of a 35% increase in LPG (cooking gas) prices charged to distributors in northern Brazil after the privatization of the Reman refinery

Written by Ruth Rodrigues
Published 27/01/2023 às 21:29
Updated 22/02/2023 às 01:40
The distributor had warned about the possible risks of the privatization project of the Reman refinery to the North of Brazil market. Fogás now points to the strong growth in LPG prices charged to distributors when selling the product.
Photo: Petrobras

The distributor had warned about the possible risks of the privatization project of the Reman refinery to the North of Brazil market. Fogás now points to the strong growth in LPG prices charged to distributors when selling the product.

The fuel market scenario in Northern Brazil is not at all favorable for distributors this Friday, (27/01). After the privatization of the Reman Refinery, in Manaus, which took place in November 2022, LPG prices charged to distributors from Amazonas and Roraima rose by up to 35%. Fogás warns of the consequences of the privatization project in fuel supply in the region at the beginning of the year.

Fogás points out problems in the LPG distribution market in the states of Roraima and Amazonas after the privatization of the Reman refinery

The Petrobras refinery privatization project continues to have serious consequences for the national fuel market in early 2023.

After the privatization of the Reman refinery, in Manaus, which took place in November 2022, the LPG distribution market in Roraima and Amazonas was strongly affected.

The distribution company Fogás points to the increase in prices charged to distributors for the sale of the product.

Since the sale of the refinery, the price of LPG to distributors has increased by R$1.240 per ton, 35% above the average price charged by Petrobras in other regions.

During the privatization process, Fogás told Cade and the ANP that if the new owner raised prices, local consumers would be affected, as Amazonas and Roraima depend exclusively on Reman for fuel supply.

The sale of the Petrobras refinery to Atem Distribuidora has been causing strong conflicts in the distribution of LPG in the north of the country.

According to Fogás, Reman attributed the price increase to the sale of LPG from Petrobras to Atem at the same price it sells to distributors in Coari, in Amazonas.

Coari is an important natural gas terminal, which distributes production from Petrobras' natural gas fields in the Solimões basin, in the Urucu complex, one of the largest in Brazil.

As a result, the sale of LPG to consumers in these states could be strongly affected over the next few months.

Fogás publishes an open letter to the ANP warning of the high prices charged for LPG in the fuel market in the north of the country after privatization of the refinery

After the privatization of the Reman refinery and the excessive increases in LPG values, Fogás released an open letter to the ANP.

In it, the distributor points out that, even with the worst living conditions in the regions of Brazil, residents of the North region are still having to pay the highest prices for fuel.

According to Fogás, LPG is being sold in Belém for the same price as in Coari, without considering the high costs of river transport and pilotage between the two locations.

“This unjustifiable subsidy, which is equivalent to more than 10 reais per cylinder, allows, for example, that LPG distributors based in Belém can have more competitive prices to operate in most of the state of Amazonas and even in Manaus”, said the distributor.

The company said that, before taking any internal decision regarding the future of its operations in the distribution of LPG, it needs to know what is Petrobras' position regarding the LPG pricing policy in Coari.

Now, Fogás hopes that the authorities in the fuel sector can intervene in the unstable scenario of the commercialization of LPG, caused by the privatization of the Reman refinery.

Ruth Rodrigues

Graduated in Biological Sciences from the State University of Rio Grande do Norte (UERN), she works as a writer and scientific disseminator.

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