Rio de Janeiro’s Gas Market Faces Regulatory Hurdles Amid Emerging Free Market Growth and Tariff Reforms for 2026

Naturgy, controlling CEG and CEG Rio, seeks to renegotiate gas supply contract terms with Petrobras to ease minimum consumption constraints that currently block industrial clients from migrating to the free market in Rio de Janeiro. Existing contracts set consumption floors of 1.6 million m³/day for CEG and 800,000 m³/day for CEG Rio, limiting the volume Naturgy can release to free market users without penalizing captive consumers. Petrobras has expressed willingness to discuss more flexible terms to support market opening starting in 2026. This impasse has already resulted in regulatory penalties against Naturgy by Agenersa for unjustified resistance to user migration requests. Meanwhile, regulators and concessionaires debate the minimum consumption thresholds qualifying users for free market status.

Compared to São Paulo, where 44 contracts have been signed and gas volume migration reached over 3 million m³/day (approximately 30% of state demand), Rio’s free market growth remains slow due to these regulatory and contractual frictions. The initial migration involved large steelmakers like CSN, Ternium, and Gerdau, yet additional 12 industries await resolution of migration terms. Industry representatives advocate expedited solutions to unlock competitive pricing benefits potentially reducing production costs by up to 20%.

At the federal level, the National Petroleum Agency (ANP) plans a comprehensive tariff review cycle for 2026-2030, advancing a phased methodology to stabilize cost of capital assumptions and tariff bases, with final decisions expected by mid-2026. The regulatory agenda includes formalizing investment approval processes and harmonizing tariff frameworks to support infrastructure expansion. The Conselho de Usuários stresses the need for clear governance on investments, aligned with national infrastructure plans totaling R$37 billion to expand pipeline networks and mitigate bottlenecks.

This evolving framework under the New Gas Law aims to boost competition by expanding free market gas volumes, currently at about 10% nationally, with increasing participation from new suppliers and independent traders. However, structural limitations such as network capacity, reinjection rates near 54%, and legacy contract rigidities constrain growth. Government initiatives like the “Gás para Empregar” decree promote infrastructure deployment and regulatory harmonization to foster a dynamic market ecosystem. Meanwhile, the Ministry of Mines and Energy’s recent complaint to Cade signals heightened scrutiny of state-level distribution tariff increases, seeking to contain cost escalation that could hinder industrial competitiveness.

Overall, Rio de Janeiro’s market opening remains conditional on resolving supply contract flexibility, regulatory alignment, and infrastructure investment governance, positioning 2026 as a pivotal year for realizing broader free market potential.