Government publishes plan to reduce Petrobras’ share of gas sales

The government published this Tuesday (3rd) a resolution with guidelines for reducing Petrobras’ presence in the natural gas market. The objective is to try to take off the paper the promised competition in the sector, today strongly dominated by the state-owned company.

The measures are considered by the market to be a fundamental step towards the implementation of the new gas market, but there are doubts regarding their effectiveness, since the defense of competition and states have decided against the proposal.

Currently, Petrobras accounts for about 85% of the volume of natural gas purchased by piped gas distributors in the country. Since the end of 2021, the state-owned company has been questioned for a 50% increase in the price of the input in new supply contracts.

In early May, the state-owned company’s prices rose again, by 19%, following the rise in international prices after the start of the war in Ukraine. The transfers to the consumer have already started in the states that have quarterly adjustment.

The CNPE (National Energy Policy Council) resolution gives the ANP (National Oil, Gas and Biofuels Agency) 180 days to complete a diagnosis of competitive conditions and prepare a program for Petrobras to waive supply contracts.

Due to difficult access to pipelines, partners of the state-owned company in the pre-salt sell their share of production to Petrobras itself. The idea is to release this gas and eliminate obstacles for private companies to compete for the market.

The text also determines that Petrobras allows, in new contracts, the buyer to reduce the contracted volumes without penalties. The state-owned company will also have to hold fuel supply auctions and remove barriers for other companies to access the outflow infrastructure.

Natural gas is an important input for industry, mainly in segments such as glass and chemical products, and is also used by commerce and households in states with a more developed distribution network.

It is also consumed by taxi drivers and app drivers who have chosen to exchange gasoline and ethanol for CNG (natural gas for vehicles).

The opening of this market was one of the first slogans of the Minister of Economy, Paulo Guedes, who promised at the beginning of the government a “cheap energy shock”, with increased competition in the sector.

But the regulation of the new measures was delayed and the escalation of international quotations had the opposite effect on tariffs.

“The resolution was very good because it addresses the transition of market opening, which was not foreseen in the Gas Law”, says Adrianno Lorenzon, director of Natural Gas at Abrace (Brazilian Association of Energy Consumers).

He points out that the text deals with issues that still depend on regulation, such as third-party access to gas pipelines and the integration of networks, in addition to proposing the harmonization of state and federal laws.

The market complains that recent measures by states and CADE (Administrative Council for Economic Defense) go in the opposite direction of the spirit of the law, especially in relation to the advancement of Compass, a company of the Cosan group, in the sector.

The government of São Paulo, for example, authorized its subsidiary Comgás to build a gas pipeline connecting the coast of São Paulo to the metropolitan region of the capital, which is questioned by large consumers as a step towards verticalization of the activity, prohibited by the Gas Law.

“Day-to-day has gone in another direction”, says Lucien Belmonte, superintendent of Abividro (Brazilian Association of the Glass Industry).

The sector also questions CADE’s technical opinion in favor of the acquisition, by Compass, of Petrobras’ share in Gaspetro, a company that participates in 18 piped gas distributors in the country. The case will still be judged by the municipal court.

If it takes over all the companies, Compass will have influence over two-thirds of gas sales in the country. The company, however, says it has agreements for the sale of up to 12 shares in Gaspetro to third parties.