Minister of Mines and Energy rules out fuel shortages after rise in oil prices due to war

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According to Silveira, Petrobras has had ‘responsibility’ in fuel supply. In May, Petrobras changed its pricing policy to try to avoid large fluctuations in value. Minister Alexandre Silveira JN The Minister of Mines and Energy, Alexandre Silveira, ruled out this Wednesday (18) the risk of fuel shortages in Brazil due to the increase in the price of oil on the international market, due to the war between Israel and Hamas . “Petrobras has been fully responsible for the issue of fuel supply in Brazil. In fact, this responsibility lies with the Ministry of Mines and Energy, to maintain product quality and guarantee supply”, he declared. Petrobras changed its pricing policy in May, to meet the government’s wishes, which want to avoid large variations in fuel prices. Previously, the company considered the quotation prices for a barrel of oil on the international market. In May, the company explained that its prices for distributors would be in the range between: the highest value that a buyer can pay before wanting to look for another supplier and the lowest value that Petrobras can charge in the sale while maintaining a profit. Although Petrobras produces a large part of the gasoline and diesel consumed in Brazil, the country still depends on imports – whose prices are defined according to international prices. When there are large discrepancies between the value on the international market and the domestic price, import activity is no longer economically attractive for some companies and this puts pressure on supply. A 6.4% increase in the price of a barrel Until the publication of this report, a barrel of Brent oil – used as a reference in the market – was being traded at US$91.28. This represents an increase of 1.5% compared to the previous day and 6.4% compared to last Wednesday (11). According to Silveira, “Petrobras is always working to observe volatility [internacional], but very focused on its internal costs. That’s what we made a commitment to the people. Petrobras does not need to be subservient to the international price.” The minister stated that the company must observe the price on the international market because the country is not self-sufficient in the production of petroleum-derived fuels, “but we do not have to consider it, because Petrobras it is much more competitive than many international oil companies.” Effects of the war Silveira stated that the war between Israel and Hamas does not directly affect the energy sector. The minister highlighted that Israel and Palestine are not oil-producing states. “They are not two countries producers. This, in terms of energy, gives us, not comfort, but a certain stability that the reflections are not direct reflections, they are indirect. […] This conflict continues to create a climate of economic depression as a result of the insecurity it creates, especially in that region, but also extending throughout Europe”, he stated. The minister met this Wednesday morning (18) with the president of Petrobras, Jean Paul Prates, and the secretary general of the Organization of Petroleum Exporting Countries (OPEC), Haitham al-Ghais. Joining OPEC+ To journalists, the minister stated that Brazil is not considering, in principle, joining OPEC+ – -group formed by OPEC countries and Russia. “Brazil does not analyze this possibility at first. It is clear that a country with the production possibility of Brazil is of interest to OPEC+, but our view is that the Brazilian economy needs to be stimulated and one of the great stimuli is to create internal competitiveness in fuel prices”, he stated.

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