Fuel Supply Tensions Emerge as Petrobras Holds Firm on Diesel Distribution

Petrobras, Brazil's leading oil company, is refusing extra diesel requests from distributors due to a domestic-global price disparity, influenced by Middle East tensions. This refusal impacts Brazil's agricultural sector amid high global diesel prices. Supply tensions emerge in Rio Grande do Sul, affecting local farmers during the peak harvest.

Brazilian state-run oil giant Petrobras is rejecting requests from fuel distributors for additional diesel supplies as local prices dive to a record discount compared to global rates. Industry sources revealed this to Reuters, citing Middle East tensions as a catalyst for rising global prices.

The stubborn price gap is disrupting domestic diesel sales, hitting Brazil's robust agricultural sector during harvest season. Petrobras limits sales strictly to contracted amounts, refusing to permit distributors to profit from potential future price hikes, confirmed a company insider.

In southern Brazil's agricultural hub, Rio Grande do Sul, farmers face fuel supply issues despite assurances of ample stock. The oil regulator ANP is probing complaints of supply shortages, while industry players see the crux in buyer-seller price disputes within Petrobras's price framework.

(With inputs from agencies.)