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Brazilian Industry Says It Won’t Accept Increases in Bolivia’s Gas Prices

The president of the São Paulo Manufacturers Federation (Federação das Indústrias do Estado de São Paulo) (Fiesp), Paulo Skaf, has called for a "firm reaction " by the Brazilian government in response to the decision by Bolivia to nationalize its gas and petroleum sectors.

According to Skaf, the government must demand the preservation of Brazilian investor rights and respect for the contracts signed by the two countries.

"We are opposed to having Brazilian investors accept losses. We cannot allow a government, a president, a congress, that has been legitimately elected by the Bolivian people to just say that from now on things are going to be different. They have an obligation to take into consideration what happened in the past and respect contracts," declared Skaf, adding that the industrial sector in São Paulo was not inclined to accept price increases that result from new negotiations with Bolivia.

Brazil imports around 24 million cubic meters of natural gas from Bolivia daily. After travelling some 3,100 kilometers in the Bolivia-Brazil gas pipeline, 75% of the gas imported from Bolivia is consumed in the state of São Paulo.

Domestic Investments

In reaction to the Bolivian president’s decision to nationalize petroleum and natural gas reserves in his country, the Brazilian Association of Piped Gas Distributors (ABEGAS) is calling for new investments to ensure a gas supply from domestic sources.

Brazil is suffering the effects of president Evo Morales’ move, since Petrobras has two refineries in Bolivia, and Brazil is a big consumer of Bolivian gas. Since 1995 Petrobras and its partners have invested around US$ 1.5 billion in Bolivia.

"We are informed that there is enough natural gas to supply the Brazilian market, where the demand is very great. All we lack is a government plan, and that is what we don’t have. We are exposed," the president of ABEGAS, Romero de Oliveira e Silva told reporters in an interview.

"We are at a critical moment for us to formulate a plan for Brazilian natural gas self-sufficiency. We have to move rapidly to avert future supply difficulties."

Agência Brasil

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