PGE-SC Seeks to Prevent Increase in Natural Gas Prices from Petrobras Supplied to SCGás to Maintain Commodity Stability

With the End of the Agreement That Determines the Price Stability of the Commodity Supplied to SCGás, PGE-SC Seeks to Extend the Contract So That Petrobras Does Not Implement Another Increase in Natural Gas Prices and Maintains Current Values

The Attorney General’s Office of the State of Santa Catarina (PGE-SC) filed an action last Friday, (05/13), to prevent the increase in the price of natural gas from Petrobras supplied to SCGás. Thus, the agency intends to extend the contract that prevents changes in commodity values to ensure there is no rise in the expenses of the state and the population regarding fuel and its derivatives.

Natural Gas Supplied to SCGás by Petrobras May Have Stable Prices After PGE-SC Requests Extension of the Contract That Prevents Changes in the Value of the Commodity

Petrobras is the largest oil and gas company in Brazil and one of the largest in the world and currently carries out strong supply and distribution of fuels in all states of the country. Thus, aiming to keep the price of natural gas stable in the state of Santa Catarina regarding the state-owned supply to SCGás, PGE-SC has filed a legal action to extend the contract that prevents the company from changing the value of the commodity for the next few months. 

This occurred because the injunction that prevented changes in the terms of the contract between the oil company and the concessionaire expired this month, and the prosecutors are now trying to extend, until December, the stability of the commodity price. The main objective of this action is to prevent the price of natural gas from increasing from 12% to 16.75%, as established by the state-owned company in the new contract with SCGás, which has not yet come into effect, aiming to ensure more affordable prices for the state of Santa Catarina. 

Petrobras adjusts the values of natural gas supplied to distributors in Brazil every three months, but SCGás is estimating a growth beyond expectations for the coming months. This is happening because, with the war between Russia and Ukraine, the price of the commodity has risen significantly worldwide and, consequently, affected the Brazilian production chain. Thus, if the attorney’s office cannot secure the approval of the contract extension, there could be a significant blow to the economy of the state of Santa Catarina due to the increase in the price of natural gas. 

PGE-SC Alerts to the Problems That the Increase in the Price of Natural Gas from the State Supplied to SCGás Will Bring to the Economy and Supply of the State 

The main reason for accelerating the legal action for stabilizing the prices of natural gas in Santa Catarina until December is the increase in the price passed on to SCGás consumers, which is expected to occur in July. Thus, PGE-SC seeks to ensure that the contract is extended until the adjustment in the distributor’s prices, as a way to guarantee that the pass-through of the commodity does not significantly affect the lives of the population. 

Despite this, the action is still in court and is being processed in secrecy, following the decision to dismiss the case, which was made on April 28 by Judge Laudenir Fernando Petroncini of the 1st Public Treasury Court of Florianópolis. Thus, PGE-SC’s action argues that the judge decided to dismiss the case based on procedural arguments, unrelated to the merits, which should not proceed with the contract between Petrobras and SCGás. 

Finally, the attorney’s office alerts to the impacts that this increase in the value of natural gas will bring to the population, as the decision will affect the supply of gas to thousands of residences and commercial and industrial establishments.