Abrace is seeking more flexible rules for the federal government’s gas auction, arguing that non-segmented industrial supply is the best way to ensure fair pricing and greater competitiveness.
The Brazilian Association of Large Industrial Energy Consumers and Free Consumers (Abrace) has expressed concerns regarding the current guidelines proposed by the Ministry of Mines and Energy (MME) for the upcoming natural gas auction.
The entity argues that the rules, which provide for the splitting of available volume among specific industrial sectors, could limit competition and undermine the efficiency of the process.
For Abrace, the auction represents a strategic opportunity to boost the national gas market.
The association believes that by fragmenting supply among distinct groups—such as the chemical, petrochemical, fertilizer, glass, ceramic, and metallurgical sectors—the government creates barriers that hinder a broader and more transparent bidding process for the molecule.
The impact of competition on the market
The entity highlights that market opening should be guided by freedom of negotiation, allowing industrial consumers to participate in the auction on equal terms.
In Abrace‘s view, segmentation runs counter to the dynamics the sector expects for the development of natural gas in Brazil.
We believe that the opening of the natural gas market and the dynamics of industrial customers within this market increase expectations for a highly competitive auction. That is the role of market agents: to foster the market, increase competition, and enhance transparency across all segments of the natural gas value chain.
Beyond questioning the segmented lots, Abrace reinforces that pricing efficiency is directly proportional to the number of interested participants.
The proposal for adjustment aims to ensure that the federal government’s gas effectively acts as a driver for attracting investment, in addition to strengthening job creation in the domestic industry.
Outlook for the sector
With the auction scheduled for later this year, discussions regarding the supply model remain at the center of the industry’s agenda.
The MME‘s goal in dividing the volume into groups is to ensure distributed access to inputs, but Abrace‘s position underscores the need for a balance that does not sacrifice the competitive fluidity of the market.
The expectation now is that the government will evaluate the contributions received during the public consultation before publishing the final version of the tender.
The final decision on the auction structure will serve as an important gauge of the maturity of the country’s free gas market and the state’s role as a driver of supply.
