Brazilian industrial leaders are urging the federal government to fast-track its strategy to boost competition in the natural gas market, while consumers push for faster reforms and producers become the target of government policy.
The group argues that Brazil is at risk of losing industrial competitiveness without urgent action to lower energy costs. "We are committed to secure more gas supply and competitive prices to meet increasing international competition and cut domestic idle industrial capacity in the country," energy-intensive industries association Abrace's president Paulo Pedrosa said.
Brazil's industrial natural gas consumption on the pipeline network fell to 33mn m³/d in January, the lowest level since April 2020, when it reached approximately 28.1mn m³/d. It was nearly a 13pc decrease from January 2024.
Reform efforts in Brazil's natural gas sector have gained momentum after state-owned energy research bureau EPE studies showed federal government-owned gas could reach industries for under $7/mmBtu — less than half the current average. On 11 June, minister Alexandre Silveira met with industry leaders to reaffirm plans to expand infrastructure access and cut prices. A key step is the first federal government gas auction, expected to take place by December via state-owned marketing firm PPSA, pending a new resolution under national energy policy council CNPE.
The federal government is intensifying efforts to boost competition in Brazil's gas market to lower prices and support industrial growth — a move that is escalating tensions with the oil and gas sector and especially Petrobras, which still dominates infrastructure and market share.
The latest offensive came with a government plan to increase revenue by R35bn ($6.2bn) from the industry over two years through tax changes, new exploration licenses and faster monetization of state-held oil. Since 2024, a series of fiscal and regulatory measures have been introduced to increase domestic gas supply and public revenue, including curbing gas reinjection, revising special taxes on prolific fields, updating royalty benchmarks and accelerating auctions and production-sharing deals.
While the government frames these actions as necessary to stabilize public finances and boost gas supply, the oil and gas industry views them as interventionist and potentially harmful to investment and operational stability.
