Transpetro Terminals And Pipelines Will Be Opened To Competitors, According To Government Plan

The Government Plan Aims to Ensure That Refineries, Distributors, and Importers Will Have Access to Transpetro Terminals

In light of transactions aimed at validating measures that had the potential to reduce oil derivative prices, the government is discussing with authorities associated with Congress the dispatch of a plan to make Transpetro, a subsidiary of Petrobras, which operates terminals and pipelines, “public.”

The project’s main objective is to genuinely ensure that distributors, refineries, and importers have access to Transpetro’s terminals, which, according to government members’ evaluations, are significantly underutilized.

The submission of the text, which will discuss the government’s desire to open Transpetro’s terminals, is being communicated with Congress to be included in the amount of plans that have the potential to help reduce oil derivative prices amid the current inflationary surge. Such a plan could impact the reelection chances of the current president, Jair Bolsonaro.

17% Cap on Basic Needs Also Under Discussion

Among the proposals to be analyzed is the attempt to define a 17% cap on ICMS for electricity, fuels, gas, transportation, and telecommunications. The text of the proposal presented by the government was approved in the Chamber of Deputies and will be discussed and evaluated by senators.

As a wholly owned subsidiary of Petrobras, Transpetro has a performance focused on transport management, which includes pipelines, terminals, and maritime transport. Transpetro, specializing in pipelines and terminals, has over 14,000 kilometers of gas and oil pipelines, 47 terminals, of which 20 are land-based and 27 are waterborne, and 55 ships.

According to sources familiar with government negotiations, Transpetro is legally obligated to donate and share its terminals and pipelines. However, in practice, sharing terminals and pipelines has not occurred. The plan aims to enhance this “donation” of terminals and pipelines in a more impactful manner.

To persuade lawmakers, government representatives have emphasized that there are sections of pipelines with over 50% underutilization. When approached, Transpetro has not yet commented.

Punishment Instruments According to ANP

The proposal could provide more tools to the National Agency of Petroleum (ANP) to allow refineries, importers, and distributors to use Transpetro’s pipelines and terminals. The current decision regarding the donation of terminals is seen as a very generic condition, and the ANP currently only has two punishment instruments, which are fines and the revocation of Petrobras’s license (which is impractical).

In 2021, the issuance of a temporary measure with this proposal to open Transpetro’s terminals was blocked by Bento Albuquerque, former Minister of Mines, who was replaced by economist Adolfo Sachsida. The proposal was initially constructed by members of the Ministry of Economy’s technical area.

In discussions with Congress, one issue has been widely debated; it states that this individual project does not have the potential to solve the full range of problems that the government intends to eliminate, although it may help reduce prices. Furthermore, the legal area is still evaluating the occurrence that the government plan cannot be sent through a provisional measure; to validate it, a bill would be necessary.

According to Helder Queiroz, a professor at the Institute of Economics at UFRJ, Federal University of Rio de Janeiro, and former director of the ANP, the proposal is good in theory but is ineffective in practice given the urgency the government needs to reduce fuel prices.

“It’s a measure for the medium and long term, so it wouldn’t be sufficient to meet what the government aims for, which is to compete with lower prices quickly,” declares Queiroz, adding that the underutilization is not that significant when analyzing over longer periods, such as one or two months.