Brazil entered the 21st century, favored by a situation of strong world growth, which caused commodities to appreciate, benefiting the country. However, as of 2013, this scenario changed, beginning the period of low of the commodity super cycle.
An expected effect of reducing economic activity is that it causes resource idleness. However, in the case of port terminals for the discharge of fuels in Brazil, this did not happen; on the contrary, the terminals were busier than in the period before the recession.
However, some foreseeable consequences of cooling economic activity are the contraction, postponement, and cancellation of investments.
As a result, the utilization of the capacity to receive imported fuels is in the process of saturation. And at the same time, investments in domestic production do not point to an increase in supply capacity.
Given this scenario, an analysis was made on the supply and demand of diesel oil in the country. The results indicate that the demand for diesel oil may exceed the supply capacity in 2026 considering a medium growth scenario. One way to avoid a supply crisis would be through the creation of incentives for investments in port infrastructure with a focus on diesel oil imports. At the same time, it is necessary to encourage the production of biodiesel.
ESTIMATION OF DIESEL OIL DEMAND
To estimate the demand for diesel oil, it is necessary to project how much the Gross Domestic Product (GDP) will grow in the coming years. The projections for growth of the Brazilian economy published by the Central Bank Focus Bulletin for the period 2019-2022 were considered.
To consider a longer time horizon, until 2028, an annual GDP growth rate of 2.50% is assumed, starting in 2023, which was the rate projected by the survey for the year 2022. From these estimates of growth in the demand for diesel oil, the total volume of the product that needs to be offered in the next ten years was projected, following the following assumptions:
• The volume of demand for diesel oil, in 2018, of 46.9 million tons, as reported by the National Agency of Petroleum, Natural Gas and Biofuels (ANP);
• The estimated annual growth rates of demand for diesel oil from 2019 onward were applied to the value of 2018.
ESTIMATION OF THE DIESEL OIL SUPPLY
It is estimated that the national park is able to deliver around 45.5 million tons of diesel oil per year, the sum of production that was reached in 2014 (42.0 million tons) with the maximum production of the Abreu e Lima refinery in 2016 (3.5 million tonnes). In 2014, the use of installed refinery capacity reached its highest value (94.9%), and the national park delivered almost 42 million tons of diesel oil. However, in 2014, the Abreu e Lima refinery was just inaugurated and it participated with just over 34 thousand tons in that offer.
Regarding imports, the port data analysis of the selected sample showed that the system found the level of exhaustion at the mark of 11 million tons imported in 2017, taking into account the number of waiting hours and the decreasing productivity. As it is not sustainable to maintain for several periods the level of port indicators observed in 2017 for diesel oil discharges, it was considered that the port will be able to internalize a volume of 10 million tons of diesel oil every year in an environment of economic growth.
In view of the scenarios presented, the demand for diesel oil should exceed supply capacity in the year 2026 considering the growth scenario of the median of the Focus survey. In the fastest growing economic scenario, demand would already outstrip supply in 2024. With economic growth remaining at the lower end of the confidence interval, demand would not exceed supply over the projected horizon. Therefore, it is concluded that a crisis of supply of diesel oil in Brazil within the next five years may occur.
Thus, in order to avoid the risk of a “blackout” in the transportation sector due to a shortage of diesel oil, it is recommended, in the short term, to create incentives for investments in port infrastructure for the reception, storage, and dispatch of imported diesel oil.
In order to mitigate the problem in the medium term, greater incentives for the processing of larger amounts of biodiesel are needed. Although biodiesel production is increasing in the country, it is still very low compared to diesel oil. In 2018, only 4.85 million tons of biodiesel were produced, according to ANP, representing only 10% of the demand for diesel oil in the same year.
That is, clearly, there is an opportunity to increase the participation of biodiesel in the Brazilian transport matrix, which, in turn, would increase the country’s energy security, reducing external dependence. In addition, this would represent a decrease in carbon emissions, cooperating for the conservation of the environment.
