Ultrapar reaffirms interest in Refap

Brazilian energy conglomerate Ultrapar reaffirmed its interest in acquiring Petrobras' 201,000 b/d Alberto Pasqualini refinery (Refap) in Rio Grande do Sul state.

The partial privatization of the country's refining sector will improve market dynamics and competitiveness, according to Ultrapar's chief executive Frederico Curado. "We have valid premises for this investment and there is no sign from Petrobras that would change the course of negotiations," Curado said on an earnings call today.

Market participants have raised concerns regarding Petrobras' divestment plan, which includes the sale of eight refineries by year's end, after Brazilian president Jairo Bolsonaro moved last week to replace Petrobras' chief executive Roberto Castello Branco with army general Joaquim Silva e Luna.

Bolsonaro announced the change on social media last week, following claims he would not interefere in the state-controlled company even as he complained about its recent hikes in wholesale fuel prices.

Amid the turbuluence caused by the managerial shakeup and Balsonaro's criticism of Petrobras' pricing policy, Ultrapar has renewed its interest in acquiring the Refap refinery, first announced in January.

Fuel sales at Ipiranga, Ultrapar's distribution arm, decreased by 5pc to 5.8bn l in the fourth quarter compared to the same year-earlier period, reflecting the impact of the Covid-19 pandemic and related recession last year.

The drop was mainly the result of low demand for motor fuels used to supply Brazil's mostly flex-fuel car fleet, which includes E27 gasoline -- a 27pc blend of anhydrous ethanol -- and hydrous ethanol, which fell by 9pc to 2.8mn l in the fourth quarter on the year. Diesel sales fell by 2pc to 2.8bn l.

By Gabrielle Moreira