The supply crunch intensified as the government delayed publishing operational regulations for the additional R$1 per liter subsidy announced in early September. The Finance Ministry promised publication “by the end of the week” but missed the deadline, leaving Petrobras unable to adjust prices despite confirming its intention to participate in the subsidy program. The state company stated the subsidy is “compatible with the company’s interests” but requires complementary legal acts before implementation can proceed.
Rio Grande do Sul’s agricultural federation Farsul filed formal complaints with the National Petroleum Agency warning that fuel restrictions during planting could force producers to sow outside optimal windows, potentially reducing productivity. The federation calculated that diesel reaching R$9 per liter, as occurred in April, would add R$1.47 billion to costs across the state’s main crops. Diesel prices represent a significant portion of mechanized operation expenses, covering soil preparation, planting, spraying, harvesting and transport.
The Abicom importers association reported scheduled October diesel imports have collapsed to 150,000 cubic meters compared to 850,000 in September, just as seasonal demand typically peaks with harvest activity. Price defasagement reached 104 percent, or R$2.87 per liter, between Petrobras domestic pricing and international parity on September 14, making private imports economically unviable. President Lula stated the government has already spent R$47 billion on fuel subsidies following the outbreak of conflict between the United States and Iran.
This article was curated and published as part of our South American energy market coverage.
