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Government will fight Petrobras' monopoly in the aviation kerosene market

Written by Paulo Nogueira
Published 25/11/2019 às 17:25

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Government will fight Petrobras monopoly

Breaking Petrobras' monopoly could influence the reduction in the price of airline tickets. Aviation kerosene represents more than 30% of the cost of aviation companies.

Next year, the government is interested in ending Petrobras' monopoly in the aviation kerosene segment in the country, said Marcelo Sampaio, executive secretary of the Ministry of Infrastructure, during an event in Rio de Janeiro, currently emphasizing the state's dominance in the terminal. Petrobras announces a 4% increase in cooking gas at refineries.

“We understand that for next year it will be a fight against what we call the aviation kerosene monopoly. Petrobras owns the entire kerosene chain. We have, perhaps, one of the most expensive kerosenes in the world, and kerosene is responsible for more than 30% of aviation costs”, said the executive, this Monday, 25.

“We are going to revisit the way this QAV is sold and how it is produced”, he commented, without going into details. The first step towards the entry of this competitor was taken last week with the inclusion of the terminal in the list of projects of the Investment Partnership Program (PPI), which is responsible for government concessions and privatizations.

Sampaio explained that the proposal from the Ministry of Infrastructure is to revise the contract, which has expired for five years. By dividing the fuel terminal in two, it will allow a company to enter the aviation kerosene market, the so-called QAV, by importing the product.

Eduardo Sanovicz, president of the Brazilian Association of Airlines (Abear), stated that kerosene “is the mother of all battles” in the airline industry.

According to the association, in 2018 fuel accounted for 32% of the costs and operating expenses of Brazilian companies. The association complains that, even producing almost 90% of QAV used in the country, the price follows the international market.

According to Abear, although the entry of a new importer is good news, “the changes with the greatest potential for reducing costs and generating benefits are linked to the pricing model and the tax burden on domestic supplies”.

The economic team prefers to encourage the opening of the market to other companies, rather than interfering in Petrobras' pricing policy.

The state-owned oil company is in the process of selling oil refineries, seeking to get rid of half of its capacity in the sector, later concentrating its refining park in the Southeast, the main consumer region of fuels in the country.

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Paulo Nogueira

An electrical engineer graduated from one of the country's technical education institutions, the Instituto Federal Fluminense - IFF (formerly CEFET), I worked for several years in the areas of offshore oil and gas, energy and construction. Today, with over 8 publications in magazines and online blogs about the energy sector, my focus is to provide real-time information on the Brazilian employment market, macro and micro economics and entrepreneurship. For questions, suggestions and corrections, please contact us at informe@clickpetroleoegas.com.br. Please note that we do not accept resumes for this purpose.

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