Americas News
Diesel Shortage in Brazil Adds Pressure to MGO Bunker Market
A 50% tax levied on diesel oil export in Brazil, including MGO and LSMGO, has added pressure to the country’s bunker market.
The levy, introduced on March 12, applies to MGO and LSMGO exports and applies to the total invoice value and not solely on the product value, the Brazilian energy firm Petrobras said in a note to customers on Tuesday.
“For illustrative purposes, to achieve a desired net remuneration of USD 1,000 per ton, the invoice amount must be USD 2,000 per ton, so that 50% corresponds to the tax due and 50% to Petrobras’ net revenue,” it said in a note.
A local source told Ship & Bunker that the tax is applicable to MGO and LSMGO sales to international vessels.
The source added that Brazil is currently short on diesel, and Petrobras needs to supply diesel to the domestic market.
"We are fully aware of the significant impacts of this measure on our clients and on the MGO and LSMGO market in Brazil," Petrobras said.
Brazil’s domestic diesel prices have risen following a rise in global prices amid the Middle East war.
According to media reports, trucker groups in Brazil are threatening a strike in response to rising diesel prices.
Meanwhile, the tax does not apply to VLSFO sales.
“We emphasize that this tax has no impact on VLSFO sales,” Petrobras said.
VLSFO still makes a major chunk of the country’s total bunker sales, the source added.
The exemption is likely to limit overall demand disruption, with most vessels continuing to bunker VLSFO.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 1004.50 | 72.00 | 1777.00 | 30.00 |
| Rotterdam | 784.00 | 20.00 | 1193.00 | 14.00 |
| Houston | 806.50 | 28.50 | 1240.50 | 28.50 |
| Fujairah | 1032.00 | 28.50 | 1642.50 | 9.00 |
| Americas Average | 981.50 | 6.50 | 1337.00 | 38.50 |
| Global 20 Ports Average | 1014.00 | 3.00 | 1510.00 | 16.50 |
| Global 4 Ports Average | 907.00 | 12.50 | 1463.50 | 1.00 |
| Global Average Bunker Price | 1012.00 | 3.00 | 1464.50 | 19.00 |
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