Cooking gas price soars in Amazonas after refinery privatization

Between the beginning of December and last week, the average price of a 13-kilogram cooking gas cylinder rose more than R$ 10 in Amazonas, from R$ 112.95 to R$ 123.15, up 9%. In the same period, the national average price fell by almost R$ 2, to R$ 108.02.

According to local distributors and resellers, the disparity is a reflection of the privatization of the Manaus refinery, which began to be operated by the Atem group in December 2022, 15 months after signing the purchase agreement for the Petrobras asset.

The escalation in the price of the product was immediate, according to industry executives. Data from the ANP (National Agency for Petroleum, Gas and Biofuels) show that, despite being more expensive, the 13-kilogram cylinder in Amazonas followed the national average curve until the week of December 3, 2022.

From then on, the curves take off, the result of a first readjustment promoted by the privatized refinery. Today, according to companies in the sector, a kilo of LPG (liquefied petroleum gas, as cooking gas is called) is sold by the Manaus refinery at R$ 5.60, while Petrobras charges between R$ 3.14 and R$ $3.35 depending on delivery point.

Also in the refinery’s zone of influence, Roraima is another affected state. In one month, the price of a 13-kilogram cylinder rose 6.4%, reaching R$ 128.82 last week.

Atem says that the refinery produces only 10% of the volume needed to meet the local market and that it buys the rest from Petrobras in Coari, 370 kilometers from Manaus, where the state-owned company has a base for receiving production from the Urucu gas field. .

“With the logistics of acquiring LPG, Ream [Refinaria do Amazonas, novo nome da unidade] has to bear the costs of operating a waterway terminal, ship transport and pilotage, among others”, says the company, in a note.

“Ream reaffirms its commitment to follow a transparent policy in its pricing strategy, supported by technical criteria and always within market norms”, says the company.

Its main customers, the distributors Fogás and Amazongás, alerted Cade (Administrative Council for Economic Defense) about the risks of market concentration by a private agent.

In the process of assessing the operation, after authorized by Cade, the companies stated that the structure for receiving LPG in Amazonas necessarily passes through the Ream terminal, to which the bases of the two companies are connected.

To Cade, Fogás said he saw “insurmountable difficulties” in seeking gas from other refineries, since Ream “is the only refinery that is installed in Manaus and, at the same time, maintains a private logistics infrastructure for receiving and disposing of products”.

The main concern, warned the companies, was the possible increase in the price of the product, since Petrobras was able to dilute costs in the prices charged by its various refineries throughout Brazil.

“If currently Petrobras, as a national ‘player’, has a standardized national pricing policy, enabling the practice of similar prices in all regions of Brazil, such a scenario will certainly not be the same with the control of a local private group “, he told Fogás.

In a note, Cade said that in view of the competition concerns of interested third parties and the autarchy itself, “the deal received approval from the autarchy conditioned to a Merger Control Agreement (ACC) that provides for a series of obligations”.

Among the obligations is the permission to access the facilities for moving and storing products at the terminal connected to the refinery, the unbundling of the asset and the appointment of an individual or legal entity to monitor compliance with the measures.

The sale of the Manaus refinery is part of a process to reduce the state’s presence in the refining area, initiated during the Michel Temer (MDB) government and supported by a term of commitment at Cade, which suspended investigations into anticompetitive practices against the state-owned company.

The process is criticized by unions of oil workers and should be reviewed by the Luiz Inácio Lula da Silva (PT) government, which advocates more investment in refineries in the country.

Among the criticisms is precisely the possibility of market concentration in private companies, since refineries outside the Southeast region tend to have well-defined geographic influences, with little chance of competition.

When contacted, Petrobras did not comment on the matter until this text was published.