The rise in the price of a barrel of oil has had major impacts on virtually all supply chains. Diesel, derived from petroleum, is the main fuel used in cargo transport, and its price in Brazil is on a par with the international market price. Thus, variations in international prices for a barrel of oil directly affect Brazil, even with the country producing about 75% of the diesel consumed here.
Most of the diesel we use in the country (77%) is destined for the road transport segment, with cargo trucks being the main fuel users.
Figure 1: Diesel consumption in Brazil. Source: : EPE – Energy Research Company (2021 data); Analyses: ILOS.
The more distant the road route to be traveled, the more representative the cost of diesel in handling. On a route of one thousand kilometers, for example, from Campo Grande (MS) to Santos (SP), or from São Paulo to Brasília (DF), fuel is equivalent to about 50% of the costs (fixed and variable) incurred in the route, with other costs related to the driver, tires, lubricants, among others.
Thus, successive increases in the price of diesel have a direct and very significant impact on the cost of transporting cargo and, consequently, on the cost of all production chains that need to move products.
In May 2022, diesel cost an average of R$ 7 / liter at Brazilian retailers. By way of comparison, in May 2020, during the pandemic period, when demand was significantly reduced and there was no war between Russia and Ukraine, the cost per liter of diesel was only BRL 3 / liter.
Figure 2: Price of diesel at resale. Source: ANP (consultation on 26/05/2022); Analyses: ILOS.
It is a global challenge to deal with so many supply uncertainties and such high fuel and input costs. In Brazil and in the world, generalized inflation corrodes businesses and reduces people's purchasing power.
May the instabilities be appeased in the near future!
References:
EPE – Energy Research Company (2021 data)
CNN Brasil – Why Petrobras has almost no competitors in fuel production
Maria Fernanda Hijjar
https://ilos.com.brExecutive Partner of ILOS, holds a master's degree and a degree in Production Engineering from the Federal University of Rio de Janeiro (UFRJ). With more than 10 years of experience in the field of Logistics and Supply Chain, working on several projects, management and participation in research associated with the subject. She has more than 20 articles in newspapers, magazines, periodicals and congress annals, being co-author of several titles in the COPPEAD Collection by Atlas publishing house and in the Panorama Logístico Collection ILOS and CEL / COPPEAD.
