Sale of Petrobras refinery in Betim (MG) could rise

Located in Betim, in the Metropolitan Region of Belo Horizonte, the Gabriel Passos Refinery (Regap) is considered the largest Petrobras unit in Minas Gerais. With 53 years of operation, the plant supplies the entire state, except for a part of the Triângulo Mineiro, and the Federal District with various products, such as gasoline, diesel, cooking gas, fuel oil, green petroleum coke, turpentine and aviation kerosene .

The refinery, which has an authorized refining capacity of 166,000 barrels of oil per day, was put up for sale in 2019 by the federal government.

The consequences of the privatization of Regap are still incalculable, but, according to estimates by the Union of Oil Workers of Minas Gerais (Sindipetro-MG), it could employ 2,500 people, a number that doubles during the maintenance of the industrial park.

Another aspect that can be changed is the collection of taxes, such as the Tax on Circulation of Goods and Services (ICMS), since it is common for private companies to have tax benefits and exemptions.

It is as if there is only one bakery in a city, which sells all the bread that is produced, and which is privatized.

(Anselmo Braga, director of Sindipetro-MG)

The payment of taxes is a form of contribution by the refinery to the Minas Gerais economy. Information from the Petrobrás Agency indicates that Regap is responsible for an annual revenue movement that exceeds R$8.6 billion in taxes for Minas Gerais, which is equivalent to 4% of the entire tax collection in the State.

Minas Gerais population will pay the bill

Petrobras workers have denounced the privatization of Regap, which is part of the sale of a package of 8 refineries in the country, as an attack on national sovereignty. The prices of products, such as gasoline and diesel, can become even more expensive, as explained by Anselmo Braga, director of Sindipetro-MG and of the Single Federation of Oil Workers (FUP).

“A company that buys Regap will continue to have the Minas Gerais market at its disposal. We say that, in fact, companies are not buying the refineries, but the market. This is not logical. It is as if there is only one bakery in a city, which sells all the bread that is produced, and which is privatized. Does it make sense to argue that the price of bread will decrease if there is a guarantee to sell everything produced?”, he asks.

The companies did not build refineries and now want to buy Petrobras at a bargain price.

(Anselmo Braga, director of Sindipetro-MG)

Braga refers to the main argument used by the federal government to justify the sale of the refineries, which would be a way of increasing competition, which would encourage a decrease in the value of the final products. However, he points out that “there is no competition in this market, despite having been authorized since the 1990s for private companies to work both in refining and in oil extraction”.

“In other words, any company that wants to build a refinery in Brazil can. And nobody wanted to build because the refinery is an investment that pays for itself in the very long term and that Brazilian industrialists do not have the courage to make. In exploration, Shell and Texaco, for example, have been operating in the country for years. The companies did not build refineries and now they want to buy Petrobras at a bargain price”, emphasizes the union leader.

Manaus Refinery was sold for 30% of its value

Precisely for this reason, economist Juliane Furno considers that, in practice, what will happen with the sale of refineries is the replacement of a “public monopoly” by a “private monopoly”.

“You are not going to change the state of the federation to fill up your car because the price of the gas station that receives gasoline from the private refinery is more expensive. In other words, we are on the verge of forming regional monopolies”, argues Furno, in an article published in Brazil in fact.

This, according to Anselmo, could happen in Manaus, where, in August of this year, the Isaac Sabbá Refinery (Reman), was sold for 30% of its value to Atem Distribuidora de Petróleo, according to calculations made by the Institute of Strategic Oil Studies, Natural Gas and Biofuels (Ineep). According to the study, the refinery is valued at a minimum value, at the highest exchange rate this year, of US$ 279 million, when the value negotiated by the state-owned company with the potential buyer was US$ 189 million.

Pricing policy linked to international values

One of the strategies used by the federal government to attract potential buyers was the implementation of the import parity price (PPI), a pricing policy that links Petrobras’ values ​​to exchange rate fluctuations. This change happened in 2016, when the state-owned company was under the command of Pedro Parente, appointed by Michel Temer (MDB).

This new calculation model, which defines the prices of fuels sold at refineries, is responsible for the various adjustments that led gas canisters to more than R$100 and gasoline to more than R$7 a liter in many states. Anselmo points out that, if it weren’t for the PPI, current fuel prices would be approximately 60% cheaper.

How does a refinery work

Refining is the transformation of crude oil into essential products for the daily lives of the population. The production of derivatives from petroleum basically involves three main processes: distillation, conversion and treatments.

Distillation is the process of separating derivatives, in which oil is heated at high temperatures until it evaporates. This vapor returns to a liquid state as it cools at different levels within the distillation tower. On each level, there is a container that collects a certain petroleum by-product.

Conversion is the process that transforms the heavier and less valuable parts of oil into smaller molecules, giving rise to nobler derivatives, which increases the use of oil. And, finally, treatments are processes aimed at adapting derivatives to the quality required by the market. In one of these processes, for example, sulfur is removed, which guarantees the quality of the diesel.

Source: BoF Minas Gerais

Edition: Elis Almeida

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