Government underestimated diesel demand in Q1, data suggests

Cargo trucks refuel in countryside São Paulo. Photo: Alf Ribeiro/Shutterstock

The Jair Bolsonaro administration miscalculated demand for diesel in Q1 2022, according to data from government agencies. Diesel sales totaled 15 billion liters in Q1 2022, according to the National Oil Agency (ANP) — 200 million more than forecast in a report produced by a research company linked to the Mines & Energy Ministry.

Meanwhile, diesel sales in January-April were up 2.1 percent year-on-year, above the projected 0.8 percent increase. Currently, the government expects demand for diesel in the latter half of 2022 to be just 0.2 percent higher than last year.

With this year’s surge in demand, it now looks likely the government’s forecast for the next six months will also be an underestimate. Last week, Petrobras warned the government that Brazil could face diesel shortages in Q3 — precisely when demand usually spikes due to grain export season.

As a matter of fact, the frequency of cargo transport on roadways saw a 37-percent year-on-year growth during Q1, according to FreteBras, an online platform where companies hire cargo transport services. The numbers suggest the growth was fueled by the agribusiness sector, which benefited from a massive surge in commodity prices.