Fuel consumption grows in Brazil in the first half

One of the main challenges for Brazilians this year is dealing with fuel prices. Since the beginning of the year, pumps at gas stations have only readjusted prices upwards, to the despair of drivers, truck drivers and motorcyclists.

Several factors influenced the rise in prices, such as the Covid-19 pandemic and the beginning of the war in Ukraine. These events had a direct impact on the price of oil, and consequently on the country’s fuels.

But, even with the rise in prices, fuels derived from petroleum recorded high sales in the first half of 2022. This is what revealed an unprecedented survey by StoneX, which made an x-ray of the trade in diesel, gasoline and hydrous ethanol.

According to the survey, readings of indicators for Brazilian economic activity in the first half of the year exceeded analysts’ estimates. The Gross Domestic Product (GDP) increased by 1.0% in the first quarter and the monthly data for the productive sectors showed growth since the month of February.

Therefore, forecasts for this year’s GDP have been revised upwards, currently between 1.5% and 2.0% over 2021. Among the factors that contributed to this result are the strong trade balance with other countries and the expansion of household consumption, particularly in the service sector.

The improvement in exports reflected both the increase in the quantity exported and, mainly, the increase in the international prices of food, metal and energy commodities.

The growth in demand was the result of the fall in the unemployment rate, the readjustment in the value of federal social assistance programs and the recovery in the real average income of work after 17 consecutive months of declines.

After several federal government stimulus measures for consumer income and subsidies to important sectors, growth is expected to maintain its widespread pace among activities in the second half of the year.

Diesel

In the first half, accumulated diesel sales reached 30.42 million m³, beating the record of the historical series, with the North (+6.75%) and Central-West (+6.25%) regions having the highest cumulative variation, in qualitative terms. The Southeast continued as the main demander of the product, totaling 11.77 million m³ consumed – an increase of 3.5% when compared to the first half of 2021.

The expansion in demand for the fuel comes amid an increase in mobility levels for diesel-powered vehicles. According to the ABCR index (Associação Brasileira de Concessionárias de Rodovias), the flow of heavy vehicles in toll plazas in Brazil increased by 2.1% in the first half of 2022, when compared to the same period last year.

Gasoline

Gasoline sales in the first half of 2022 totaled a volume of 19.7 million m³, which represents an increase of 10.8% compared to the same period of the previous year and 3.9% above the average of recent years.

Since April 2021, demand for fuels has shown significant growth in the national market, mainly influenced by the advance of vaccination against Covid-19, which provided a more intense resumption of economic activities, as well as the reopening of schools and offices, promoting increase in urban mobility.

Hydrous ethanol

Ethanol sales in the first half of 2022 totaled 7.7 million m³, a decrease of 15.7% in relation to the total sold in the first half of 2021 and a retraction of 9.4% in relation to the average of the last 5 years.

This movement in biofuel sales is directly linked to the crop failure seen in the 2021/22 sugarcane crop cycle (April-Mar). The 2021/22 sugarcane season in the Center-South of Brazil suffered from long periods of droughts and intense frosts during the year 2021, thus causing an early break in the harvest of crops.

As a result, the supply of biofuel was compromised in the last months of the harvest, resulting in an upward movement in the prices of ethanol sold.

From November/21, when the sugarcane harvest ended, until April/22, with the beginning of the new sugarcane cycle, ethanol prices began to climb that caused historic records for biofuel.

The survey concluded that the demand for fuel in Brazil during the first half of this year was significantly heated, with the aggregate sales volume reaching 68.2 million m³, the highest value of the last 6 years for the period.

When compared to the first half of 2021, there was an increase of 2.51% in the indicator, with gasoline marking the biggest positive change, in quantitative terms, in consumption, going from 17.80 million m³ to 19.72 million m³ .

According to the Brazilian Association of Highway Concessionaires, an increase of 9.4% in the total flow of vehicles in toll plazas was recorded in Brazil. At the same time, the improvement in some economic indices also explains the expansion in consumption, especially for diesel.

For the second half of the year, the outlook is for sustained demand. The reduction in energy prices in the international market, the perspective of Brazilian GDP growth for the coming quarters of the year and the improvement in consumer income continue as the main contributors to this vision.

But analysts also warn of the possibility of a slowdown in the global economy, according to the deterioration of some economic indicators in the US, Europe and Asia, as well as the logistical difficulties arising from the war in Eastern Europe, may serve as a barrier to the continuity of consumption. heated.