en.Wedoany.com Reported - Petrobras has initiated the first round of negotiations with distributors, seeking to mitigate the planned adjustment to natural gas prices originally set for August. The company's proposed concept of price ceilings and floors has been endorsed by the Brazilian Association of Pipeline Natural Gas Distributors (Abegás). In an episode of the Gas Week podcast (Issue 024), Abegás Executive Director Marcelo Mendonça stated that, given the current competitiveness level of natural gas molecules, demand in the Brazilian market has "hit a ceiling," and criticized public policy for insufficient attention to natural gas.
Mendonça emphasized that the key issue to address is the expected 25% increase in natural gas prices in August, coinciding with the next quarterly price adjustment under contracts with Petrobras. The company had already raised molecule prices by 19% in May. The executive revealed that negotiations with Petrobras on mitigation measures have progressed, and the price ceiling and floor mechanism is "very interesting" for distributors, though details of the proposal have yet to be finalized.
The state-owned company has indicated it is evaluating different measures. Mendonça assessed that the installment payment plan used in previous crises is "uncertain as to whether it is the best option." Abegás has engaged with Petrobras and other suppliers, but negotiations with private suppliers have not advanced. "Other producers are lagging behind because we are moving forward with Petrobras. We haven't received any signals from other producers," he said.
Beyond short-term issues, state franchise operators argue that Brazil needs to establish a new price index for natural gas to unlock new demand over the long term. Mendonça considers this a separate issue but one that needs to move forward. "We need long-term market signals to develop other applications and attract new industries, achieving reindustrialization."
Mendonça suggested that natural gas prices should use different indices for different applications, stating: "At current prices, we have already hit the market ceiling." He cited an example where, for natural gas to gain traction in the steel industry, its price needs to be linked to coal. Regarding tariff reviews for transporters, Mendonça viewed positively the decision by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) to propose a new valuation of the Regulatory Asset Base (BRA) for transporters based on the RCM methodology, noting that the intense debate over tariff reviews "is part of the market's maturation process." He refuted questions about increased distributor margins and claimed that scaling up natural gas helps stabilize tariffs. Mendonça also criticized energy policy for lacking focus on natural gas, such as in discussions on data center policy, and stated that in the regulatory dispute with ANP over pipeline classification, the market "lacks maturity."
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