Fertilizer producer Yara criticizes the lack of competitiveness in the Brazilian free gas market, highlighting that Petrobras’ dominant position still dictates prices and hinders industrial investment.
Although Brazil has made progress in opening up its natural gas market, allowing consumers to transition from the captive to the free market environment, strategic players believe the system still lacks fluidity. For Yara, a leading company in the fertilizer sector, the current structure presents a fundamental hurdle: the absence of effective competition that would allow the price of the molecule to reflect real supply and demand dynamics.
During the ROG.e event, recently held in Rio de Janeiro, Yara‘s Energy Manager, Lara Terra, emphasized that the presence of a dominant market player continues to dictate the pace of pricing. According to the executive, this lack of competitive functionality undermines the predictability necessary for industries to plan new capital investments in the country.
The current challenge for the free market isn’t so much about liberalization. The issue we need to tackle is competitiveness.
Yara‘s concerns resonate with other industrial giants. Ternium, a steelmaker that also participated in the debates at ROG.e, reinforced that the current cost of the input remains a limiting factor for Brazilian industrial development. While the ANP (National Agency of Petroleum, Natural Gas and Biofuels) seeks to address the situation through proposals like gas release, aimed at reducing Petrobras‘ influence, the state-owned company argues that merely changing the selling agent does not, in itself, guarantee a reduction in final prices for consumers.
Logistical and regulatory bottlenecks
Beyond the cost of the molecule, transportation costs are also at the center of the criticism. Thiago Araraki, director of MGás, points out that technical requirements for transporting the input create unnecessary barriers to entry. The need for extreme precision in volumes to avoid penalties burdens the sector and discourages the participation of smaller consumers, who are essential for increasing market liquidity.
The frustrating scenario in Rio de Janeiro
At the state level, the advancement of the free market also faces setbacks. Vladimir Paschoal, a board member at Agenersa, described local progress as frustrating. Despite minor movements, the sector is experiencing regulatory deadlocks, such as the legal dispute between the agency and the distributor Naturgy, which involves the migration of Braskem and CSN plants to the free market.
The future of the clean energy sector and Brazil’s industrial development depends directly on overcoming these obstacles. Market expectations are now turning toward the implementation of the National Pact for the Development of the Natural Gas Market, which is seen as a key piece in harmonizing state rules and removing the barriers that continue to stifle energy competitiveness.
