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IBP positioning on derivatives pricing

10/19/2021 | 16h12
IBP positioning on derivatives pricing
Divulgation Divulgation

The Brazilian Institute of Oil and Gas (IBP) believes that efficient markets maximize benefits to society because they balance competitiveness and continuous investments over time. The pricing of fuels in Brazil, which includes petroleum derivatives and biofuels, should take place according to clear market assumptions, avoiding cyclical mechanisms that cause distortions and imbalances that compromise supply and continuity of investments.


In this context, the alignment of prices to the international market is presented as the necessary approach to guarantee market supply at the lowest costs for the population, either by enabling market complementation from lower cost sources, or by transparency to investors in refining, logistics and distribution in Brazil.


Fuel consumption has grown throughout 2021 and has already reached pre-pandemic levels. The internal production capacity of oil products is lower than the demand and the balance to supply the growing market is through imports. From January to August 2021, 26% of the diesel volume and 8% of the gasoline were purchased on the foreign market.


Even with the 9th refining park in the world and with a production capacity of 2.3 million b/d, Brazil is a net importer of oil products, a situation that should not change in the next decade.


Without a clear perception on the part of economic agents that prices will vary according to market rules, as with all other commodities, there is no security for the expansion of the national refining park, for the expansion of biofuel production or for importing agents complement the domestic deficit of derivatives, especially considering the current global scenario of lag between supply and demand for commodities due to the rapid and significant post-pandemic recovery.


The fuel market is globally integrated and it is the alignment of prices to the international market, adopted in Brazil since 2016, which ensures transparency regarding relative prices and gives the correct signal to economic agents to invest in increasing supply and improving distribution logistics, ensuring national supply.


The IBP advocates the free formation of prices and freedom to import derivatives and biofuels, as a way to promote competition, attract investment, generate new jobs and, consequently, guarantee national supply in the short and long term.

Font: T&B Petroleum/Press Office IBP
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