Brazil Ready to Boost Gas Prices

Brazil’s state-owned oil giant Petrobras reports that growing demand for gas may mean a price increase for the Brazilian consumer.

According to José Sergio Gabrielli, president of Petrobras, the average annual increase in demand between 1998 and this year has been 14%, but in 2003 and 2004 there was a spike, with demand jumping over 19%.


Data for 2005 shows that demand remains strong. “It will be hard to sustain this kind of growth,” says Gabrielli.


He explains that for the last two years Petrobras has been selling gas at a discount to stimulate its use, but now, with a sharp jump in both demand and in the cost of Bolivian gas, it may be necessary to raise prices in Brazil.


Gabrielli points out that with Bolivia supplying 20 million cubic meters of gas per day, out of the 34 million cubic meters Brazil uses daily, “regulatory questions” in Bolivia have become important. He adds that there is also the issue of logistical infrastructure.


“We are looking into the possibility of other sources of energy. That is something we are working on,” declared Gabrielli.


ABr

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