SAO PAULO, March 17 (Reuters) - Gasoline and diesel fuel will make up a larger portion of Brazil’s refined-products trade deficit this year than they did in 2013, the head of Brazil’s petroleum regulator ANP said on Monday.
Brazil’s diesel deficit will likely rise to $9 billion and its gasoline deficit to $2.5 billion this year, Magda Chambriard, the ANP’s director general, said at an event in Sao Paulo.
In the January-November period of 2013, the latest for which the ANP data, the diesel deficit was $7 billion and the gasoline deficit “nearly $2 billion”, Chambriard said. She made her prediction despite failing to have full 2013 numbers.
The predicted rise in the deficit is based on an expected 4 percent increase in fuel demand in Brazil in 2014, Chambriard said. Brazilian fuel demand has been growing at a rate at least two percentage points above the expansion of gross domestic product for several years.
That expansion has outstripped the capacity of the 12 domestic refineries of Brazil’s state-run oil company Petroleo Brasileiro SA to meet demand for gasoline and diesel.
Petrobras, as the company is known, has also seen efforts to build new refineries fall years behind schedule. The need to import more and more fuel, much of it from the United States and India, has also saddled Petrobras, the company’s dominant oil company and only refiner, with growing losses.
Because of Brazilian government fuel-price controls, domestic fuel prices are below world prices, forcing Petrobras to take a loss on every barrel of gasoline and diesel it imports. The controls have also lowered economic returns from refining of domestic crude.
These problems have saddled Petrobras’ refining unit with losses, causing the company’s debt to soar. They have also discouraged competitors from entering Brazil’s fuels market as rivals or partners.
While diesel and gasoline are Brazil’s principal fuels, Petrobras also produces other products such as jet fuel, fuel oil, bunker fuel, liquefied petroleum gas (LPG), coke and lubricants at its refineries. Bunker fuel is used in ship engines and power plants, LPG is used for cooking and water heating and coke is used to provide heat in industrial processes such as steelmaking and concrete production.
The only fuels whose prices are controlled in Brazil are those for diesel, gasoline and LPG. (Reporting by Fabiola Gomes; Writing by Jeb Blount in Rio de Janeiro; Editing by Marguerita Choy)