All those under 30 must remember, even if vaguely, the huge government advertisements that in 2006 we achieved self-sufficiency in oil production, that is, that the volume of national oil production was already equal to or greater than volume necessary for the production of petroleum derivatives demanded by the Brazilian market. Taking this information as a basis, the question arises: why does Brazil still import some petroleum derivatives? Why are we extremely dependent on importing diesel oil?

The main answer to these questions lies in the set of Brazilian refineries, the number of plants, geographic distribution, oil processing capacity and process complexity, that is, their ability to transform crude oil into consumed derivatives. by society.

In the last two decades, analyzing the components: oil production, refining capacity and internal consumption of derivatives, we realized that there was a great focus on expanding our oil production. According to data from the National Petroleum, Natural Gas and Biofuels Agency, we went from 0.28 to 0.55 million cubic meters per day, between 2007 and 2023, an increase of 275%, which consolidated Brazil as one of the 10 largest world producers of this important commodity.

On the other hand, the last large refinery fully completed and delivered was in 1980, the Henrique Lage Refinery, in José dos Campos, São Paulo and, after that, we had 30 years without the construction of new refineries. Only in 2010 did the current 3R Petroleum, formerly the Clara Camarão Refinery, come into operation and, in 2014, the first train from the Abreu e Lima Refinery, both with processing capacities far below the additional amount needed to meet internal demand. The dynamic panel of the National Petroleum, Natural Gas and Biofuels Agency shows 19 refineries, 10 of which are large.

The national refining capacity is approximately 0.38 million cubic meters per day and is concentrated in the Southeast region (62%), followed by the Northeast and South regions (18%). In addition to the greater refining capacity, the Southeast region also has vast infrastructure for the movement of derivatives, thus creating a regional cluster that complements part of the deficit in other regions, carrying out movements by road, rail and cabotage.

Looking at domestic demand, we observe that, from 2007 to 2023, sales of A (pure) diesel oil rose from 28 to 55 million cubic meters per year (96% growth) and sales of A (pure) gasoline increased from 13 to 31 million cubic meters per year (increase of 138%), reflecting macroeconomic aspects in Brazil, such as expansion of the agricultural frontier, records in several harvests, increased exports, car sales and others.

So far we have a portrait of Brazil that invested in the expansion of oil production and the economic situation that increased the domestic consumption of oil derivatives. However, investments in refining activities were limited to meeting the requirements of the new specifications for derivatives, notably those linked to the control of atmospheric emissions, with no room for increasing the volumes of derivatives produced.

Large and promising projects such as the Rio de Janeiro Petrochemical Complex and the Premium I (Ceará) and II (Maranhão) Refineries, and the attraction of private partners to invest in the expansion of national refining capacity did not advance, contributing to Brazil becoming dependent import of the main fuels. Since 2014, on a monthly average, around 1 million cubic meters of diesel oil have been imported, which is equivalent to approximately 20 medium-range ships (used to transport refined products) docking in Brazil every month.

When we look ahead, based on the Energy Research Company's projections, we see that the need to import A diesel oil will double within 10 years; going from approximately 35 thousand cubic meters per day in 2022 to 52 thousand cubic meters per day in 2032, in other words, it will be necessary for a medium-range type ship to dock in Brazil every day. This fact arises from the projection of the average growth of the Brazilian Gross Domestic Product at 2.7% per year. National production, in the same period, will grow by just 1.2% per year, considering that investments currently planned such as the 2nd train at the Abreu e Lima Refinery, the Gaslub Hub and new hydrotreatment units are completed by 2032.

When fueling their vehicles powered by diesel engines, consumers put a mixture of fossil diesel A oil and biodiesel, a biofuel, into their tanks. Thus, the increase in biodiesel consumption will result from two factors: the increase in demand for B diesel oil and the increase in its content in the mandatory mixture, which will be 14% from March 2024, with a gradual increase expected in the following years, depending on quality approvals in tests that need to be carried out.

With a small number of production plants, Brazil is a net exporter of biodiesel. Almost 19 years after the inauguration of the first biodiesel production unit, this is the only fuel, fossil or renewable, that is prohibited from being imported. This fact is harmful to consumers, as biodiesel is a product with a mandate, that is, with mandatory consumption, coming from a small number of national producers and whose price is not subject to any type of challenge.

Over the next 10 years, Brazil will have to face major and diverse challenges to guarantee the supply of diesel oil, such as improving port infrastructure to increase their capacity and reduce waiting times for docking and unloading ships, increasing availability of terminals for the movement of products and the infrastructure to guarantee the internalization of imported volumes, given that we have a large demand for diesel oil in the interior of Brazil.

A study commissioned by the Brazilian Institute of Oil and Gas shows that, in the base scenario, 9 billion reais will be needed in investments in infrastructure in the fuel sector to meet the country's demand until 2035. The challenges in the biodiesel market for diesel cycle vehicles include the end of the market reserve, allowing the import and insertion of new biofuels (Green Diesel and Hydrotreated Vegetable Oil ), using new technological routes. Actions that would induce investments in the continuous search for improving quality and efficiency in production and logistics by biodiesel producers and traders.

It is necessary to understand that importers and producers are not on opposite sides, as if “disputing a tug of war”. They are agents that have different characteristics and modes of action. Producers work by transforming raw materials into fuels on a permanent basis throughout the national territory and importers work by identifying supply deficits and/or windows of opportunities, always aiming to complement producers' volumes to meet demand. Thus, producers and importers work together to guarantee national supply.