Associations that represent large consumers and gas concessionaires are expected to publish a manifesto against the laws passed or in progress in seven states that, in practice, bar the opening of the market, one of the main promises of Jair Bolsonaro.
Sanctioned by the president in April last year, the New Gas Law came into force almost two years after the program was launched and promised a “cheap energy shock” with the end of Petrobras’ monopoly on natural gas – projects taken up by the ministers. Bento Albuquerque (Mines and Energy) and Paulo Guedes (Economy).
To go into effect, however, it depended on each state passing a decree aligning its laws with the federal norm.
According to the manifesto of the entities linked to the gas sector, in the last months of last year, five of them (São Paulo, Paraíba, Maranhão, Pernambuco, Piauí and Ceará) changed their laws in disagreement – totally or partially – with the federal law. In Rio Grande do Norte, a bill is still being processed.
Ten entities sign the letter, which will be sent to the federal government, especially the Ministry of Mines and Energy. They are: ATGás (gas concessionaires and transporters), IBP (Brazilian Institute of Oil and Gas), Abrace (Brazilian Association of Large Energy Consumers), Abal (Brazilian Aluminum Association), Abvidro (Brazilian Association of Glass Industries) , ABPIP (Brazilian Association of Independent Oil Producers), Abraceel (Brazilian Association of Energy Traders), Anace (National Association of Energy Consumers), Anfacer (National Association of Ceramic Manufacturers for Coatings, Sanitary Fixtures and Similar) and Aspacer (Paulista Association of Tiling Ceramics).
“Several points of these new legal provisions [dos estados] cause concern, for being misaligned with the dictates of the New Gas Law”, write the entities.
According to the manifesto, state laws, in force or in progress, confront federal law by “introducing a definition of a distribution pipeline that overlaps or conflicts with the criteria for defining transport pipelines.”
Transport pipelines are those that connect production areas at sea to the mainland, for example.
The new framework put an end to the concession regime —which provided for auctions— in the segment and began to require from companies interested in the construction of gas pipelines only authorization from the ANP.
In addition, it guaranteed free access for all companies to the gas pipelines at fair prices. By this logic, whoever has the best price will win the market.
It is estimated that there will be a 30% drop on average in price with competition. The reduction could reach 50% for large consumers.
Today, private companies own 25% of the gas extracted in the country — most of it in fields in partnership with Petrobras. Without access to pipelines, the state-owned company’s partners preferred to sell their share to it without competing for the market.
For this reason, CADE (Administrative Council for Economic Defense), led by then president Alexandre Barreto, led a process that led Petrobras to sell its stake in the sector.
It was what fueled the processing of the New Gas Law. If the state-owned company did not agree to withdraw from this market, it would be prosecuted and fined for abuse of economic power.
Petrobras also owned the units that treat the gas before it is injected into the network and the terminals for importing the product by ships. And it took up most of the capacity of the large gas pipelines that transport fuel across the country.
This system led the Brazilian industry to pay for gas at least US$ 13 (R$ 71.76, at the current price) per cubic meter — more than four times the cost of competitors in the US, where the product costs just over US$ 3 (R$ 16.56). In comparison with Europe, the Brazilian industry paid 50% more in 2018.
At the time, according to the analysis produced by the consultancy Ex Ante, between 2000 and 2018, official inflation in Brazil, measured by the IPCA, rose by 209%.
In these 18 years, the unit cost of electric energy for the industry grew 497.4% above inflation. The cost of unit gas grew even more impressively: a real increase of 1,200%.
After this effort to open up the national market, the states now intend to delegate to their regulatory agencies the function of classifying (or reclassifying) pipelines, something that could prevent the arrival of new competitors.
According to the entities, large energy groups, such as Cosan, owned by businessman Rubens Ometto, are advancing in the gas market and are interested in vertical integration as a way of strengthening their business model.
They also try to impose consumption volumes on those who wish to operate in this free market for buying and selling gas.
“The definition, at the state level, of rules for classifying distribution pipelines that are not in line with federal regulation puts at risk one of the great benefits intended by the new gas market, which is the construction of a broad national market integrated through the transport system, thus promoting greater security of supply, greater availability and competitiveness of the input for all consumers in the country”, says the letter.
For the entities, this coordinated movement of the states will lead to the “verticalization of distribution, inducing the creation of ‘market islands’ fostered by regional monopolies, decharacterizing the network system and the gain of scale that would tend to benefit the consumer”.
According to the document, Pernambuco and Paraíba determined, for example, a minimum consumption limit of 50,000 m³/day for those who intend to migrate from the regulated to the free market, something that goes against what has been implemented in other states of the federation (10,000 m³/day, or zero in the case of São Paulo). In Ceará, there is even an additional charge, called “management of the free market”.
The expectation of these associations is that the government enters heavily in the defense of the legislation that it announced as a major milestone of the Bolsonaro government.
Although the CMGN (Committee for Monitoring the Opening of the Natural Gas Market) is representing the government and the ANP (National Petroleum Agency) in legal discussions involving the competence of the São Paulo regulatory agency to define which pipelines are for transport, the entities assess that there is a lack of commitment against this articulated movement of governors in a pre-election moment.
OTHER SIDE
A leaf consulted the government of the seven states mentioned in the manifesto. With the exception of representatives from São Paulo and Maranhão, the others did not respond until the publication of this report.
Arsesp (Regulatory Agency for Public Services of the State of São Paulo) informs that “São Paulo is the largest gas consumer in the country and supports the effective opening of the market”.
Through its advice, the agency says that “there is no [do estado] to verticalize any links in the chain [de gás].
“Arsesp has technically discussed with the ANP the Structural Reinforcement of Supply to the Metropolitan Region and Baixada Santista. The case is in the administrative sphere and there is no judicialization”, said Arsesp.
“Approved investments in assets [como os do grupo Cosan] aim to promote security of supply, competitiveness and expand supply. In the case in question, it is about authorization for investment in strengthening the distribution network of the concessionaire, which will not be destined for transport, but aimed at guaranteeing the supply to the São Paulo consumer based on the forecast of demand for the coming years.”
Sebastião Madeira, president of Gasmar, the gas concessionaire in Maranhão, stated that the “only way to make the market viable in the state will be to define minimum quotas for gas consumption”.
“The law imposed 500,000 cubic meters a day and the bill was lowered to 100,000 cubic meters,” Madeira told leaf. “It is a fallacy to believe that going down to 1,000 cubic meters or less will make the market viable. In the municipality furthest from the state, the cost to take only 5,000 cubic meters per day is greater than the revenue generated.”
Madeira stated that he convinced the governor, Flávio Dino (PSB-MA) to carry out the bill as a way to reduce the price of gas to generate jobs for taxi drivers and Uber drivers.
“With R$60 a driver fills a tank with 14 cubic meters of gas and drives 250 km. With gasoline, he spends R$250.
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