March 14, 2012 / 12:42 PM / 5 years ago

Petrobras faces growing fuel deficits - report

* Supply director sees gasoline imports 80,000 bpd in 2012
    * Fuel imports, price freeze source of major losses for
Petrobras
    * Petrobras could face losses without hike in gasoline
prices

    SAO PAULO, March 14 (Reuters) - Brazil's state-run oil
company Petrobras will have to make up for a
shortfall in local refining capacity by importing ever larger
amounts of diesel and gasoline, while new refining capacity
suffers delays, a local paper reported Wednesday.	
    Paulo Roberto Costa, Petrobras' supply director, told the
Valor Economico newspaper that the company expects to import
80,000 barrels of gasoline and 160,000 barrels of diesel a day
in 2012.	
    Petrobras posted major losses in its supply division over
the past year due to its need to import gasoline and diesel at
international prices and sell them at local prices for a loss
due to the government's price freeze on the two fuels.	
    In December, Costa said Petrobras was importing a record
70,000 barrels of gasoline a day.	
    The company is building four new refineries which would
raise current refining capacity from 1.9 million barrels a day
to 3.25 million barrels a day. The first, Abreu e Lima, is due
to come onstream in July 2013 with the potential to process
220,000 barrels of oil a day, most of which will be diesel.	
    The project has suffered several setbacks, including rains
and the failing of Petrobras' partner in the joint venture
Venezuela's PDVSA to come up with sufficient guarantees to
secure a loan from Brazil's BNDES national development bank.	
    Petrobras has a monopoly on Brazil's refining capacity. It
controls 12 refineries, which are running at a record capacity
of nearly 93 percent, Costa said.	
    Unplanned interruptions to refining would cause Petrobras to
turn even more aggressively to the international market for fuel
imports.	
    Costa said the growth in fuels consumption in Brazil over
the past few years has broken out of a longstanding trend of
closely tracking economic growth. 	
    He said in 2010 the consumption of gasoline, diesel and
other derivatives grew by 9 percent while the economy grew by
only 7.5 percent. Then in 2011, fuels consumption grew 8 percent
while the economy grew at 2.7 percent and this year fuel
consumption is due to grow 12 percent, while economic growth
should come in around 3.5 percent.	
    The consumption of gasoline alone grew 18 percent in 2010,
24 percent in 2011 and has so far expanded 32 percent in the
first two months of 2012. If this trend continues, it would have
a major impact on Petrobras earnings if the government does not
raise gasoline prices at the pump and allow the company to
regain its profit margin in refining and distribution.	
    Costa said that the supply of ethanol, which fell nearly 20
percent in 2011 due to bad weather and poor investment in
replanting low yielding cane fields, will only recover in 2014.
Costly ethanol was one of the factors that propelled motorists'
consumption of gasoline.	
    Brazil's new middle class and higher levels of disposable
income from a quickly rising minimum wage have also supercharged
automobile sales over the past several years.	
    Costa said Petrobras is importing 15 percent of its needs
for petroleum derivatives. 	
    Petrobras representatives were not able to confirm the
contents of the interview after a request from Reuters.

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