IBP Statement - Fuel Marketing Oversight Measures
The Brazilian Petroleum, Gas and Biofuels Institute (IBP) is closely monitoring the impacts of the conflict in the Middle East on Brazil’s fuel supply and recognizes that government measures aimed at mitigating and preventing potential abusive pricing practices are necessary. However, some of these measures present implementation challenges and may create distortions that affect the decision-making process of market participants.
With regard to fuel prices in Brazil, IBP believes that the discussion should be guided by technical criteria and take into account the entire supply chain within the existing regulatory framework. The current international environment is marked by significant instability, resulting in heightened volatility and upward price pressures, with direct effects on supply and replacement costs in the Brazilian market.
In the case of diesel, Brazil’s supply is composed of both domestic production and approximately 27% imported volumes. Within this framework, price formation in the domestic market responds, to varying degrees, to international quotations, exchange rate fluctuations, logistics costs, and the replacement cost of the product.
It is important to note that the fuel delivered to the final consumer is not composed solely of fossil diesel, but also includes a 15% biodiesel blend. Consequently, any tax change, subsidy, or cost variation affecting only one of these components is not transmitted to retail prices in a linear, immediate, or full manner. The Brazilian fuel market operates under a free pricing regime within a competitive environment in which each economic agent establishes its own pricing policy.
IBP considers legitimate the oversight actions aimed at preventing potential abusive practices and supports the efforts of public authorities to uphold legality and transparency. However, punitive measures—including fines, business suspensions, and other sanctions—must be supported by prior and thorough verification of tax and commercial documentation, a proper understanding of the fuel supply chain, and respect for the due process rights of the economic agent involved.
This principle should guide all enforcement actions in order to preserve legal certainty, ensure the continuity of fuel supply, and protect consumers, particularly during periods of heightened international volatility. Without such safeguards, there is a risk that situations resulting from normal market dynamics, inventory replacement at prevailing market prices, biodiesel blending requirements, and different procurement strategies may be incorrectly classified as irregular conduct.
