Photo: Petrobras News Agency
Brazil had expected to become a regional exporter of fuel when it discovered massive offshore crude reserves four years ago. The economic boom in the Latin American giant however has put a hole in those plans, making it rely heavily on imports, according to Reuters.In 2010, Brazil had imported 3.2 million barrels of gasoline, they expect to reach that figure by the end of August this year. And the figures are expected to rise boosted by seasonal demand during the end of the year.
At least 5% of Brazil’s domestic fuel is expected to be imported. Analysts expect that as global economic growth slows, Brazilian demand for fuel may decrease as well.
Meanwhile domestic supplies are expected to contract as state oil company Petrobras, which had drafted plans for fuel exports in 2006 – 2007, opted to postpone its 300,000 barrels per day refinery by two years and focus on its upstream business instead. The has however planned four new refineries with the first one set to open in 2012 – 2013.
High sugar prices are also hurting fuel supply
Many Brazilians use flex-fuel cars which use sugar-cane ethanol, or any combination of that biofuel and gasoline. But as commodity prices soared and pushed the price of sugar up by 85%, millers moved away from ethanol and now don’t produce enough biofuel to meet market demand.
Short on domestic supply and alternatives, Brazil is expected to import massive amounts of corn-based ethanol from the U.S. by the end of the year.