Brazil’s natural gas distributors are bracing for a significant price hike. According to the industry group Abegas, state-run oil company Petrobras could raise the price of natural gas sold to distributors by roughly 20% starting in May.
The expected increase is driven by the global surge in oil prices triggered by the U.S.-Israeli war on Iran. Petrobras adjusts natural gas prices on a quarterly basis, tracking Brent crude. The last adjustment took place in early February — before the conflict sent oil markets sharply higher.
An even steeper hike could follow in August
The May increase may only be the beginning. Abegas executive director Marcelo Mendonça told Reuters that current market data points to a potential hike of over 35% in August. If that materializes, it would represent a dramatic cost escalation in just a few months.
Mendonça was blunt about the industry’s capacity to absorb the shock. “We don’t have the margin, we don’t have the resources to withstand a price increase of this magnitude,” he said.
Distributors ask government for relief
Faced with these projections, distributors are turning to the Brazilian government for help. They want measures to cushion the blow — similar to what the government has already done for diesel and jet fuel.
So far, no specific relief package has been announced for natural gas. But the pressure on Brasília is mounting as the May adjustment approaches.