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The State Company Will Reduce by More Than 11% the Price of Natural Gas Passed to Fuel Distributors Due to Oil Variations. However, Petrobras’ Change May Not Affect Consumer Prices.
The Brazilian fuel market continues to stabilize in the early weeks of 2023. Now, Petrobras has announced that, starting on February 1, it will reduce by 11% the price of natural gas sold to fuel distributors nationwide. The decision was made due to fluctuations in international oil prices. However, the final prices passed on to consumers may not change even after this measure.
Fuel Distributors Will Receive Natural Gas from Petrobras at a Reduced Price Starting February 1 This Year
Following changes in the global oil sector at the beginning of the year, Petrobras has been making some adjustments to its product prices.
Among these adjustments is the 11% reduction in the price of natural gas sold to fuel distributors in the national market.
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The oil company announced that the measure will take effect from the first day of February this year, with the change being valid nationwide.
The price reduction was calculated compared to the price practiced in the previous quarter, the period from October to December.
This drop, the company explained, does not refer to the price of LPG (cooking gas), whether packaged in cylinders or sold in bulk — but rather to the sales price of gas to distributors, transported and distributed through pipelines.
Contracts with fuel distributors in Brazil are updated every three months, as reported by Petrobras.
Thus, the reduction in the price of natural gas was a direct consequence of new negotiations with companies, as well as fluctuations in Brent oil prices and the exchange rate.
In this quarterly analysis, Petrobras pointed out that oil prices fell by 11.9% and the exchange rate depreciated by 0.2%.
Petrobras’ Decision Was Driven by the Reduction in the Pricing Formula Specified in Contracts. Reduction in Natural Gas Price May Not Reach Consumers
The state oil company highlighted other factors for the reduction in the price of natural gas passed to distributors.
Among them, the main factor was the reduction in the pricing formula, which decreased from 16.75% of Brent to 14.40% of Brent.
This decision was stipulated in contracts signed at the end of 2021, effective from January 1, 2022, to December 31, 2025.
Despite a significant reduction in the price of natural gas in the national fuel sector, the state-owned company emphasizes that its decision may not directly impact the final consumer in the segment. This is because the price of consumed fuels is charged based on the distributors’ portfolios and calculated according to the rates in each region.
Additionally, Petrobras highlighted that gas tariffs for consumers are approved by state regulatory agencies, according to specific legislation and regulations.
Therefore, it is not possible to accurately calculate the impact that the company’s decision may bring to final prices in cities across Brazil.
Understand the Current Pricing of Gas Passed to Final Consumers
Today, the acquisition cost of LPG produced by Petrobras accounts for 44.8% of the total cylinder cost, followed by distribution and resale (44.7%) and ICMS (Tax on Circulation of Goods and Services, 10.5%).
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