& Tobago




Very usefull links



The Global Barrel

Tiempo Culural

Gustavo Coronel


Le Blog des
Energies Nouvelles

News Links




Dow Jones



Views and News






Brazil 2022 presidential election low
risk for natural gas

Will Bolsonaro Win the 2022 Elections?

- Poll: Lula 44pc of voters vs Bolsonaro 26pc
Natural gas has little direct impact, LPG at the center of the debate

By Flávia Pierry / Argus

Petroleumworld 10 19 2021

Next year's Brazilian presidential elections create uncertainty for the country's slowly liberalizing natural gas markets, but few see it being derailed by a future president. The LPG market, however, may face a different fate.

A September poll by Datafolha shows former president Luiz Inácio Lula da Silva supported by 44pc of voters, with current president Jair Bolsonaro polling at 26pc.

Lula's economic policy is seen by investors as likely to expand large state-run companies in the energy sector, leaving less space for private activity, and offering energy subsidies to artificially manage power, gas and oil products prices — contrary to the current direction under Bolsonaro. Gas market participants worry most that Lula could move to reverse Petrobras' exit from oil and gas markets, restoring its market dominance.

Energy will be a central part of the political debate in 2022, with power prices surging amid a drought that restrained hydropower generation. Global oil and gas prices are also climbing as the relaxation of Covid-19 social distancing measures increases demand faster than producers boost supply.

But natural gas itself will probably not be a part of Brazil's larger political debate, because natural gas has little direct impact on the general population. Only 1.2pc of natural gas consumption in Brazil comes from residential customers.

In addition, the natural gas market opening process is a five-year-old joint effort among many market participants, said Fernanda Delgado, professor at Fundacao Getulio Vargas. The process started in 2016 with the governmental program Gas para Crescer that created legal mechanisms such as the new gas law, sanctioned in April, that support and provide backing to the market opening effort.

"Undoing these processes in the opening of the gas market would backfire for attracting investment," Delgado said. It would also run contrary to a Brazilian tradition of following legal guarantees and respecting contracts, she said.

The ongoing efforts to cut Petrobras' participation in the gas markets also make it harder to reverse the market opening later, Delgado said.

"The extent of [cutting Petrobras' role in gas markets] is scantly explored and it is quite interesting since in real life this means the reduction of political interference in the gas market," Delgado said.

But there could still be some threats to the gas market under a new president. Pending regulations needed to further adjust the new gas law and updates to existing regulations could be targeted for political interference, if not completed before the election.

These regulations fall under the Brazilian Oil and Gas regulation agency (ANP), a technical entity operated by career public servants chosen through examinations, but run by five directors appointed by the president and approved by senators. The president-director Rodolfo Saboia's term ends by 2024 and his replacement will be appointed by the next president.

The enactment of state laws for natural gas markets is another area that could be open to interference, Degado said.

LPG in the middle of the turmoil

While natural gas is unlikely to play a large role in election debates, LPG is likely to be at the center of the discussion, since 91pc of Brazilian families rely on 13kg LPG vessels for cooking. The rise in LPG prices this year in Brazil, alongside higher natural gas prices worldwide, became a major concern for poorer families and a pressure point for the popularity of president Bolsonaro. The average consumer price of a 13kg LPG vessel rose from R76 ($14) in January to almost R100 in October.

The LPG distribution business became a target of Bolsonaro's populist speeches this year, as he preached that LPG distributors could be made redundant by allowing refiners to sell LPG directly to consumers.

The uncertainty surrounding the return of Lula's workers party is indeed hindering investments, according to market sources. But Brazilian energy investors have long understood how to navigate amid uncertainty.

"The electoral dispute in 2022 will happen between a populist at the right-wing or a populist at the left-wing," one source connected to the LPG distribution industry told Argus. "And to LPG, populism is always a disaster."


By Flávia Pierry from Argus Media /10 18 2021



Editor & Publisher:Elio Ohep /
Contact Email:

CopyRight © 1999-2021, Elio Ohep A. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2021, Petroleumworld   / Elio Ohep - All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.