(Adds detail of diesel import decline, falling gasoline and diesel sales data)
By Marta Nogueira
RIO DE JANEIRO, Sept 17 (Reuters) - Brazilian diesel imports fell 95 percent in August compared with a year earlier, Brazil's oil and fuels regulator ANP said, as Brazil's economy struggled through its worst downturn since the Great Depression of the 1930s.
State-run Petroleo Brasileiro SA and other licensed importers brought in 181,558 barrels of diesel in the month to supplement the output of 14 Brazilian oil refineries owned by Petrobras, as the oil company is known. Diesel imports of diesel, Brazil's most-used vehicle fuel, fell 97 percent from July.
August imports were the lowest since May 2006 and the year on year and month on month declines were the biggest since a 99 percent drop in February 2005.
"With the cooling of the economy, it's natural that this demand is falling, and as a result we are practically meeting demand with domestic production," Aurélio Amaral, ANP superintendent of refining told Reuters on Thursday.
Imports fell 25 percent between January and August compared with a year earlier. Amaral declined to estimate fuel demand for the rest of the year.
This year Luciano Libório, head of refining and supply for Sindicom, a fuels distributors' group that accounts for about 80 percent of Brazil's fuels market, expects diesel demand to fall 3 percent this year.
If that happens, it will be the first annual decline since 2009.
Gasoline demand fell 13 percent and diesel demand fell 6.9 percent in August compared with a year earlier, Sindicom said Thursday.
In addition to Brazil's economy, expected to shrink by more than 2.5 percent this year, the August plunge in diesel imports was also driven by the decline in the value of Brazil's currency, the real, against the U.S. dollar.
A weaker real has undermined most of the gains Brazil received from lower world oil prices and has made every dollar of imports cost more in local currency terms.
"Imports were stronger in the beginning of the year and the end of last year as a result of falling prices," ANP's Amaral said. "Now with oil cheap and the price of diesel more attractive abroad you have a dollar that is strong and this has caused the price difference to disappear."
Lower world fuel prices have eased pressure on Petrobras, which lost about 50 billion reais in recent years subsidizing imports after the federal government, trying to control inflation, refused to let the company raise domestic prices in line with international levels. (Reporting by Marta Nogueira; Writing and additional reporting by Jeb Blount; Editing by Andrew Hay)