Brazil: crisis in diesel supplies very soon, if policy is not changed
^ BEthanol and petrol fuel station. ^ B The prices for a liter of each fuel are shown at upper left. The ethanol fuel (^ Ialcool ^ i) is cheaper than the petrol fuel (^ Igasolina ^ i). This is Sao Paulo, Brazil. Brazil started producing ethanol fuel in 1973, and has one of the largest ethanol fuel programs in the world. The ethanol is produced by fermenting crop residues, and as such is considered a biofuel. Ethanol and other biofuels are used in motor vehicles as an alternative to fuel obtained from oil deposits. It is thought that biofuels can reduce environmental damage if developed and controlled properly, but overuse of biofuels could be harmful if it leads to more deforestation to grow biofuel crops.
Brazilian state-owned oil company Petrobras has warned the government that the country could face a diesel shortage this year unless it is allowed to sell the fuel at market prices.
According to a Reuters article, Petrobras told the Brazilian government that it will be difficult for it and other fuel importers to stock up on imported diesel in the face of the worst fuel deficit of the past 14 years, without a price increase.
" If there are no signs of use of market prices, there is a real risk of a shortage of diesel fuel during peak demand in the harvest season, with repercussions on Brazil's GDP ," Petrobras said in a presentation entitled " Fuels: challenges and solutions ".
According to the company, the shortage is more likely to occur in the third quarter, which coincides with the soybean harvest season, with the risk of turning an energy crisis into a food crisis.
" Global diesel inventories are far below the historical average ," Petrobras said in the presentation. " Petrobras alone cannot solve the global increase in energy prices ".
The Brazilian government has lobbied Petrobras to keep fuel prices lower than international standards, while President Jair Bolsonaro seeks re-election. Petrobras is also a political target of its rival, former president Ignacio Lula da Silva.
" If Petrobras stops selling diesel at international market prices for more than two or three weeks, there is a possibility that the pumps will run dry ," a senior executive at a manufacturing company told Reuters. of diesel fuel. Simply because he couldn't get the new one.
In an effort to prevent fuel prices from rising further, the Brazilian president replaced Petrobras chief executive twice this year, while the second executive, Jose Mauro Coelho, remained in office for only a few months.
The latest replacement, according to the Financial Times, is Caio Mario Paes de Andrade, a member of the team of the Minister of Economy and an entrepreneur. Even for him, however, the problem of the supply of diesel remains, which is not solved only by changing heads.
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The article Brazil: crisis in diesel supplies very soon, if you do not change policy comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/brasile-crisi-nelle-forniture-di-gasolio-molto-presto-se-non-si-cambia-politica/ on Tue, 24 May 2022 16:55:48 +0000.