(EPE, 20.Apr.2022) — Brazilian liquid fuel market continued its strong performance at the beginning of 2022 with an increase of 1.1% in January and February compared to the same period last year. This growth has been driven mainly by diesel and gasoline.
EPE estimates that Brazilian liquid fuel market will keep its upward trajectory throughout 2022, returning to 2019 levels. However, demand in 2022 should reflect to some extent the effects of rising prices, in addition to lower expectations for the Brazilian economy – a GDP increase of 0.5%.
In this April edition, EPE forecasts that diesel sales will increase by 0.8%, hydrous ethanol sales will increase by 2.8%, jet fuel will increase by 25%, and LPG will increase by 0.3% in 2022. We expect gasoline consumption to remain flat in 2022.
Agricultural production, favored by the positive picture for commodities, should be the true balance for diesel consumption. Despite a drought that affected the southern region at the beginning of the year, Brazil’s 2021/2022 grain harvest is projected to increase by 5.4% compared to 2020/2021.
EPE considers that the growth trend of mobility in Brazil will continue in the short-term. Besides, we estimate a gradual change from gasoline to hydrous ethanol in the Otto cycle fuel mix throughout 2022.
In early 2022, the spread of the Omicron variant has affected the aviation sector, albeit less intensely than in other waves. As a result, jet fuel recovery receded again in Brazil in January and February. However, EPE projects an accelerated recovery in March and April. In addition to the health crisis, the jet fuel consumption is being affected by the increase in airline ticket prices (due to the rise in crude prices) and the devalued Brazilian real, which have discouraged travel, especially on international routes.
With the increase in LPG prices throughout 2021 and early 2022, many Brazilian households have reduced consumption or have opted for replacement with another energy source, especially in
low-income families. Despite the rise in prices, EPE estimates a small growth in LPG sales in 2022, due to the implementation of cash transfer programs that help low-income families to buy cooking gas – such as Auxílio Gás dos Brasileiros instituted in November 2021 at the federal level.
Brazil’s Short-Term Fuel Market Outlook is a bimonthly report of EPE that presents projections for monthly sales of petroleum products and biofuels in Brazil. This publication aims to reduce information asymmetry, favoring decision-making in the energy sector.