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Thought by Paulo Guedes, the Minister of Economy, who expects a “domino” effect on the industrial GDP
The long-awaited 50% drop in the price of gas, as planned by the government, gained strong echoes after the publication of a study carried out by the Ministry of Economy, the Special Secretariat for Finance and the Secretariat for the Evaluation of Public Policies, Planning, Energy and Lotteries ( Secap).
According to the document, released by the MME, the halving of the price of natural gas with the creation of the New Gas Market (NMG), would generate an “Energy Shock” that would result in a 10,5% increase in Industrial GDP.
According to the minister, sectors of the economy will experience waves of growth in the first year of decline in natural gas prices.
The report shows a table with price drop variations between -1% and -50%, for example, for a 30% drop in price, the increase in GDP would be 6,3% in the first year and 4,1% % in the second year, dropping to 2,8% in the third and ending at 0,22% in the tenth year.
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The opening of the gas market, according to the MME and the Ministry of Economy, will free competition with the sale of Petrobras' assets.
The intention is that without the state company in the distribution and transport markets, there will be the entry of companies in the natural gas market, lowering the final price, since the government has large reserves of natural gas in the pre-salt layer.
Comparison with the outside
With the opening of the market, the government hopes that the price in Brazil will approach those practiced abroad. Today the price is at US$ 14 MM/Btu and it is expected that it will drop to around US$ 6 to US$ 7 MM/Btu, very close to what is practiced in Bolivia, for example.
Another parameter used was the average price of natural gas in Europe, which in 2018 was US$ 8,84 MM/Btu and in the United States, which was US$ 3,89 MM/Btu.
Achieving these prices is really a challenging objective, but the government counts on Petrobras, which will continue exploring natural gas, along with about 30 other companies, such as Total, Chevron, ExxonMobil, Repsol, which are already consolidated in the gas market or with the strengthening in this market of companies such as Shell, BP Energy and Equinor.
The entry of medium and small companies is also important, as they will contribute to exploration in onshore fields, important for consumers far from coastal cities.
It is with this offer and the decrease in prices for small and large consumers that the government hopes to carry out the country's economic development, since gas is a fuel widely used by industries.
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