With the risk of a diesel shortage at Petrobras starting in August, fuel distributors multiply their import licenses

In view of the warning about the shortage of Diesel in the country, executives in the diesel sector talk about caution in the face of tighter import offers and the unpredictability of Petrobras' diesel supply. The state-owned company identifies that the volumes of diesel supplied have not accompanied the increase in orders from companies, but does not confirm the arbitrary cuts in firm orders and also says that it practices apportionment of production in line with the ANP resolution.

The concern about the shortage of diesel at Petrobras and also in view of fuel imports, is explained by the worsening of sanctions against Russia, leading part of Europe to migrate to diesel replacing Russian gas, while the summer holidays begin in northern hemisphere and the hurricane season in the United States. At Petrobras, which depends 30% on imports, demand tends to grow with the flow of the agricultural harvest.

Diesel import licenses are valid for 90 days, renewable also for 90 days. These licenses are not an “immunity” for importing diesel ahead of time, however sector agents say that the explosion in numbers is related to the moment in the fuel market, showing the efforts of companies to import larger volumes of diesel or, at least, differentiate its origin ahead.

The ANP database on fuel supply shows that, between local production and imports, the Petrobras supplied 81% of diesel in Brazil or 13,6 million cubic meters of fuel in the first four months of 2022. The percentage is below what was supplied by the state-owned company in 2019 (85,12%), the last year before pandemic, with more stable domestic demand.

diesel consumption

Brazilian consumption of diesel, part of which comes from Petrobras and part imported, rises, above all, between the months of August and October, when it is determined by the harvest and transport of the agricultural crop. At the same time, says the downstream strategist at S&P Global, Felipe Perez, global demand for diesel in the post-pandemic returns faster than supply.

Until the beginning of the war in Russia, around 60% of the diesel consumed by Europe came from Russia, a percentage gradually falling due to the closure of import of diesel from Russia. According to Perez, Europe's natural alternative is diesel from refineries in the Middle East and Asia, but American cargoes from the Gulf of Mexico are also in the European sights.

Diesel imports are up 23,9%

A survey carried out by Ipea, based on ANP data, shows that diesel imports in the first four months of 2022 were 4,7 million cubic meters, 23,9% higher than those registered in the same period of 2021 and in 41,6% that of 2019, the last year without a pandemic. In 2021, Brazil consumed 62 million cubic meters of diesel, part of which came from Petrobras. This percentage includes a volume of biodiesel added to the mix. Of this volume, 14,4 million or 23,3% of the total were imported.

The progress of diesel imports compared to consumption is higher in 2022. According to ANP data, between January and May this number reaches 26,8%, the highest percentage of the series that started in 2017 for the period. In 2020, Petrobras' dependence on diesel until May was 24% and, in 2019, 21,8%. Petrobras' share in the volume of diesel imported until May is 35,4%, close to what was seen in 2019 (35,7%), but below the 42,6% of 2021.