Regional Market Outlook on LPG (GLP) 

The prices of GLP/LPG in Brazil is expected to remain unchanged till a new formula is developed which incorporates changes in the ICMS levy on the GLP/LPG. The prices revised to average at BR$ 50 per 13kg Domestic Cylinder. To compete with importers in Brazil, Petrobras is expected to increase the production of GLP/LPG in their refineries and to increase competition in the market

LPG price Trend and Forecast in Brazil

  • The retail prices of GLP/LPG in Brazil is expected to reduce once there is a new formula is incorporated for pricing the fuel product.
  • It is expected that the ICMS value is expected to be reduced on residential and commercial sectors in Brazil.
  • The average ICMS Percent is expected to be at 12% or 14% depending upon the agreement of the states in the country.
  • The prices are expected to average BR$ 48.02 / Cylinder in 2018 with ICMS kept at 12% and BR$ 49.02/Cylinder with ICMS% kept at 14%. If unchanged it will be at BR$ 50.021/Cylinder

Production and Sales of LPG - Brazil

As per ANP, GLP Production for 2016 was at 46.1 Mn. Bbl with a CAGR growth rate of (-2.34 percent) from 2012 – 2016. The GLP consumption in Brazil from 2012 to 2016 grew at 0.77% CAGR, but fell in 2015 due to fall in forex and increase in duties on fuel products by the Brazil Government. In 2017, the demand for GLP has increased and expected to reach 84.5 Mn. Bbl.

Production and Sales of GLP in Brazil 2012-2018

  • The Production of GLP in Brazil from 2012 to 2016 has decreased by over 11.85 percent, similarly the demand for GLP in Brazil has increased by 3.69 percent. This decline in production has resulted in increased imports of GLP into Brazil from US and other neighboring countries.
  • In 2017, the production has increased in the months of June-Aug  - 2017, which has helped Petrobras to compete with the importers of GLP in the country.
  • Brazil refinery utilization reached a fiver year low during Q1-2017 due to Petrobras keeping crude runs low at its facilities because of deteriorated demand environment and focused its investments on E&P activities
  • In 2017, Petrobras approved the re-evaluation of the Petrochemical Complex, Comperj project in Itaborai, Rio de Janerio. Petrobras is expected to complete the first unit at the 165,000 bbl per day Comperj refinery by Dec-2020.

Price Trend and Forecast for LPG in Brazil

In Dec-2017, the LPG cylinder (13 Kg) price was increased by 8.9 percent due to the increase in the produce quotation charged to Petrobras from international market. It is estimated that the gas value increased about 2.53 R/cylinder. It also stated that Petrobras will revise its pricing policy of LPG and the increase of 8.9 percent will be last change under the current scheme of pricing of LPG.

LPG price Trend and Forecast in Brazil

  • The average distribution price of LPG in Brazil in 2016 was at BR$ 37.932/13kg, this has increased by an estimated 10.88 percent in 2017 to average at BR$ 42.058/13kg, due to higher imports and higher prices in the international market
  • As the Tax structure was not changed in Brazil inline with the international GLP price movement, this led to an increase of 18.71 percent in prices when compared to Jan-2017 to Dec-2017.
  • Hence, the government and Petrobras together have announced that the ICMS will be relooked and price calculation formula for GLP in Brazil will be changed in next 1-3 months time frame
  • The price increase of 8.9 percent in Dec-2017 will be kept constant till the price formula is consulted and accepted in Brazil. Petrobras is also increased production of GLP to compete with the importers into Brazil where it has lost market share