The company needs to make the adjustments because this is established in its pricing policy. The increase is mainly due to the recent appreciation of oil prices on the international market, the exchange rate and the IGP-M inflation index, associated with the share of transportation in contracts.
The product is an important input for industries, thermoelectric and serves as raw material, for example, for the production of fertilizers.
The transfer to the consumer depends on the legislation of each State. In some cases, the contracts provide for automatic readjustment. In others, the adjustment is made in tariff reviews approved by local regulatory agencies.
In any case, piped gas is expected to have a strong impact on the inflation rate in May. So far, Petrobras has already readjusted gasoline by 46.2% in 2021 this year. Diesel, in 41.6%. And gas in cylinders by 17%.
Abegás (Brazilian Association of Pipeline Gas Distribution Companies) released a note this Monday (5th of April, 2021) in which it states that the increase will be passed on to the consumer without there being “Any gain from that increase”.
According to the entity, on average 17% of the price of gas paid by the consumer reaches the distributors, corresponding to investments in network expansion and remuneration for the provision of services. Another 59% of the value is equivalent to the price of the molecule plus the transport tariff. 24% are federal and state taxes.
“The increases in the price of natural gas do not bring benefits to the distributors, on the contrary, they end up taking away the competitiveness of natural gas in relation to other sources of energy such as gasoline, fuel oil, LPG and electricity”, the statement says. Read the full Abegás note (246 KB).
Brazil reinjusts gas
The increase now goes against the statements of Minister Paulo Guedes (Economy). In 2019, the economist said he would make a “Cheap energy shock” with the end of Petrobras’ monopoly, which, according to him, would allow the value of natural gas to fall by up to 40%.
In the opinion of Adriano Pires, director of CBIE (Brazilian Center for Infrastructure) and columnist for the Poder360, greater competition in supply and greater investments in the chain’s transport segment are required.
Pires says that the new Gas Law, passed by Congress in March, did not create mechanisms to accelerate the multiplicity of suppliers. “What bothers us is that Petrobras remains the only supplier”, he declared. “Who is raising the price? It’s Petrobras. The distributor has no one to buy from ”.
In addition, the new natural gas framework did not create any mechanism to encourage the expansion of the transport network in a faster way, according to the expert.
Currently, about half of the gas that comes out of wells in the country is re-injected into the wells, as there is a lack of infrastructure to take the input to the final consumer.
The construction of gas pipelines on account of the private initiative does not take off, as it is more commercially advantageous to import gas from other countries – there is an excess supply; even Argentina exports to Brazil.
Pires believes that the constant increases in fuel prices (gasoline, diesel and gas) will have a political impact. This will require greater government creativity to contain significant readjustments.
“If the exchange rate continues to be depreciated and oil goes up in price, soon there will be a very expensive gas even in Brazil, in the short-medium term”, stated.
“The law does not encourage gas of national origin. To encourage it, it would have to promote greater gas-electric sector integration (the inflexible thermals). As the legislation did not do this, in the short to medium term the supply of gas in Brazil will occur through imported gas. And we will be more dependent on the exchange rate and [petróleo] brent.”
Sought, the state-owned company did not send positioning until the closing of the report.
UNDERSTAND WHAT IS NATURAL GAS
Petrobras prepared a video explaining all the stages of fuel production in the country. Watch below (2min47s):
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