Petrobras’ Gas Distribution Monopoly Nearing Its End: Chamber of Deputies Votes This Tuesday

Petrobras Lost Its Oil And Gas Sector Monopoly By Law Over Two Decades Ago, Check Out The Details Of The Chamber Of Deputies Vote!

The Chamber of Deputies is set to vote on Tuesday to approve a bill that could further open the natural gas market to private investors, breaking Petrobras’s monopoly.

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If approved, the law could reduce natural gas prices, says Federal Deputy Laercio Oliveira, who will present the bill in the Chamber. Its proponents argue that the law could attract 60 billion reais (US $ 11 billion) in private investments and generate 4 million jobs.

Deputy Oliveira stated that he hopes the bill will be approved without changes in the Chamber. The bill would still need to be sent to the Senate for approval.

Petrobras Lost The Oil And Gas Monopoly By Law Over Two Decades Ago, But In Practice Maintained A Virtual Monopoly In The Natural Gas Industry

Petrobras began to reduce its control a few years ago with the sale of assets, including thousands of kilometers of pipelines.

The reduction of Petrobras’s control over the gas sector now depends on the approval of legislation that allows more private companies to enter the sector in the Chamber of Deputies.

“We have the most expensive gas in the world and this has forced hundreds of industries to close in Brazil or change their energy source,” the legislator told Reuters, stating that natural gas costs more than double here in Brazil than in the international market.

The Chamber Of Deputies Project Aims To Reduce Bureaucracy In Handling Concessions And Building Pipelines

Last week, the heads of Petrobras and Golar Power criticized in two separate webinars last-minute attempts to change the proposal that was to be presented in the Chamber. Petrobras CEO Roberto Castello Branco said there are private groups interested in building government-subsidized pipelines.

“It would be a terrible idea and a misuse of taxpayer money,” he said on Friday.

The project would also open competition by changing the structure of the gas sector so that producers cannot be distributors and vice versa, Oliveira said. Petrobras closed two fertilizer plants in recent years that operated with natural gas. The exports from these units would be more competitive if gas prices were lower.

Finally, Economy Minister Paulo Guedes also supports the project that was first proposed in 2013 by the Chamber of Deputies because it aims to increase federal tax revenue.