Rio de Janeiro – Petrobras CEO Magda Chambriard said on Wednesday (1) that the company is studying the possibility of making Brazil self-sufficient in diesel production within five years.
The fuel has seen a recent surge in global prices due to the war in Iran. The conflict is taking place in a region that concentrates oil-producing countries and strategic routes such as the Strait of Hormuz, through which 20% of global supply passes, causing disruptions to the supply chain.
Brazil currently needs to import about 30% of the diesel it consumes, a petroleum derivative used by trucks, buses and tractors.
Chambriard said the company’s business plan had set an “ideal” target of reaching 80% of demand, with an expansion of about 300,000 barrels of diesel per day over five years. “We are reviewing this plan and asking whether we can reach 100% in five years,” she said during an energy event hosted by CNN Brasil in São Paulo.
The company’s business plan will begin to be discussed in May, the state-run firm’s CEO said. It is usually released in November.
Diesel prices
From the start of the war in Iran on February 28 to the week ending March 22 (latest data), the price of S10 diesel (lower-emission) rose about 23% in Brazil, according to Brazilian oil regulator ANP.
On the 14th, Petrobras implemented a price adjustment of BRL 0.38. The government has taken measures to curb the increase, such as reducing to zero the rates of PIS and Cofins federal taxes on the fuel, as well as providing subsidies (a form of reimbursement) to producers and importers. There are also ongoing talks for the government, together with the states, to apply a subsidy of BRL 1.20 per liter of fuel.
On Wednesday, another fuel sold by Petrobras, aviation kerosene (jet fuel), rose by 55%. Jet fuel accounts for about 30% of airlines’ costs.
Read more:
Hormuz: 20% of energy, 30% of LPG, 50% of sulfur
Translated by Guilherme Miranda
