Gasoline price in AM soars after privatization of refinery – 02/28/2023 – Market

In addition to causing the rise in the price of cooking gas, the privatization of the Manaus refinery now also puts pressure on gasoline consumers in the Amazon. In just one month, fuel prices rose 11% in the state, more than five times the national average.

The operation of the local refinery was taken over by the Atem group in December, 15 months after signing the purchase agreement for the Petrobras asset. Since then, gasoline at gas stations in the state has become 20% more expensive, while the national average price has risen by 0.8%.

For industry executives, current prices reflect a more real value for fuel in the region, given the high logistical costs that were previously diluted among all Petrobras operations in Brazil.

Atem says that “it follows international price parameters, involving costs such as exchange rate and freight, among others, for the arrival of the product in the North region with all the logistical specificities of the region”.

The company changes its prices every week, says the note, “with price ups and downs in line with market changes within established parameters”.

Since taking over the refinery, Atem has promoted five cuts and seven increases in the price of gasoline. In the same period, Petrobras announced only one change: an increase of 7.4% on January 25th.

According to the ANP (National Agency for Petroleum, Gas and Biofuels), gasoline was sold in Amazonas for an average price of R$ 5.58 per liter two weeks ago, almost R$ 1 more than in the first week of December. .

On the national average, gasoline cost R$ 5.07 per liter before Carnival, R$ 0.10 more than in early December.

The possibility of high prices after privatization was alerted by fuel distributors during the analysis of the asset sale process by Cade (Administrative Council for Economic Defense).

Highlighting that the refinery has a monopoly on supply in the region, Ipiranga, for example, feared impacts on its business due to “possible anti-competitive effects in the refining market”, “especially concerning price increases and availability of inputs”.

The companies claimed that there was not enough capacity to unload products from other regions in the state, which could guarantee great market power to the new owner of the refinery.

Cooking gas distributors had the same argument to contest the operation. The price of cylinders also skyrocketed in the state after Atem took over operations.

The company alleges that the refinery produces only 10% of the volume needed to supply the local cooking gas market and needs to bear the costs to bring the remainder from Petrobras’ base in Coari, 370 kilometers from Manaus.

Cade says it approved the operation “after extensive competitive analysis” and that it imposed a series of obligations on the new operator. Among them is the permission to access the product handling and storage facilities connected to the refinery and the unbundling of the asset.

The process of selling refineries was justified by the need for new investments in the sector, which would be fostered by increased competition with Petrobras, but so far the state-owned company has only managed to sell two large units.

“The difficulty that Petrobras has been going through to implement its divestment plan is public knowledge,” he wrote to Raízen, in a statement in the Cade process that analyzed the sale of the Amazonas refinery.

“It is necessary to emphasize the necessary caution on the part of the competition authority to avoid that, due to such difficulties, Petrobras’ refineries are sold in a context of market concentration and serious damage to the competitive environment, as occurs in the present case “, he completed.

The OBS (Observatório Social do Petróleo), which is linked to the FNP (National Oil Workers Federation), says that the difference in prices “shows the effects of the privatization of refineries”.

“All fuels become more expensive, as we and many other researchers have always argued over the last few years” says the entity, which is against the refinery sale process initiated by the state-owned company in 2016 and which should be reviewed by the Lula government 3.