Brazilian liquid fuel market continued its strong performance at the beginning of 2022 with an increase of 2.2% in January through April compared to the same period last year. This growth has been driven mainly by diesel, gasoline, and jet.
EPE estimates that Brazilian liquid fuel market will keep its upward trajectory throughout 2022, possibly returning to 2019 levels in 2023. This delay is due to rising prices and lower economic growth expectations.
In this June edition, EPE forecasts that diesel sales will increase by 0.8%, hydrous ethanol sales by 2.0%, gasoline sales by 0,2%, jet fuel by 21%, and LPG remain level in 2022.
Despite a drought that affected the South in the beginning of the year, Brazil's 2021/2022 grain harvest is forecast to increase by 5.7% compared to 2020/2021. Cultivated land and production is expected to increase, mainly due to favorable export dynamics, and good weather in the Mid-West. This should guarantee another record diesel demand in 2022.
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.
The aviation industry´s optimistic expectations have been somewhat dented due to rising prices, a devalued currency and less stellar growth and employment forecasts. But this has mainly affected international flights, with domestic flights forecast to reach pre-pandemic levels by the end of 2022. Despite the above setbacks, demand is increasing, and jet fuel demand should be back to pre-pandemic levels by the end of 2023.
Demand for LPG has continued declining from levels registered in 2021. Increasing prices and a faster return to offices, that decreases residential cooking, have weighed on demand. However, cash transfers and an increase in employment, especially with the recovery of the services sector, partially offset the above downward forces. Hence, LPG demand should remain 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.
Click here and read the June 2022 edition.