ANP manifests at Cade against the purchase of Gaspetro by Cosan

The oil and gas sector regulator disapproves of the purchase of Gaspetro, a Petrobras subsidiary that controls the distribution of piped gas, by Compass, from the Cosan group.

This Thursday (31), the ANP (National Petroleum Agency) filed an appeal recommending that the deal be rejected by CADE (Administrative Council for Economic Defense), alleging risks to competition and the development of the gas market in the country.

The operation, announced in August 2021, is valued at R$2 billion. Once completed, it will give Compass a stake in 19 gas distributors. The Cosan company already controls Comgás and, at the end of last year, won the privatization auction of a concessionaire in Rio Grande do Sul.

With Gaspetro, Compass now has influence over two-thirds of the country’s piped gas sales, a market power questioned by major consumers of the fuel.

In early March, CADE’s General Superintendence approved without restrictions the transfer of 51% of Gaspetro to Compass, arguing that the departure of Petrobras represented gains for competition and that there was no risk of market concentration by Compass.

In an opinion that justified the appeal request to Cade, the ANP says that “the approval, without restrictions, of the operation notified to Cade may delay the process of increasing competition in the sector or, in a more critical scenario, negatively affect the development of the natural gas market”.

In addition to the high purchasing power that Compass would have after the operation, the agency questions the company’s verticalization plans, which operates in distribution and also wants to act in the supply of fuel, which is prohibited by the Gas Law.

Therefore, it asks that the deal be analyzed by the Administrative Court of the competition defense body. If there were no appeals or if the CADE court did not ask for an analysis of the process, the decision of the general supervisor would have a final character, with the final approval of the operation.

The agency has been active and critical in relation to Cosan’s expansion in the gas sector. It approved going to court against a decree by the former governor of São Paulo, João Doria, which authorizes the installation of the company’s gas pipeline in Serra do Mar, and has issued opinions against the rapid advance of the group.

The purchase of Gaspetro was also questioned by large consumers of natural gas. On March 8, Abrace (Brazilian Association of Energy Consumers) released a note stating that it would try to reverse the decision in Cade’s collegiate.

In the note, the entity highlighted that “in the limit, this decision can lead to the replacement of the old national monopoly by a model with enormous vertical and horizontal market power operating in the sector”.