“Unprecedented” crisis slashes Brazil’s energy consumption

Mines and Energy Minister Bento Albuquerque said the pandemic of the new coronavirus (COVID-19) has thrown the Brazilian energy sector into “an unprecedented” crisis—aggravated, he argued, by the global reduction in oil prices as a result of the commercial dispute between Saudi Arabia and Russia.

Social distancing rules, Albuquerque said, designed to curb the quick spread of the disease in Brazil, have brought gasoline consumption in the country down by nearly 33 percent within a month. The demand for ethanol plunged 44 percent, diesel oil 18 percent, natural gas 20 percent, and aviation kerosene approximately 85 percent.

“The electric sector saw a 22 percent reduction, which accounts to 15,5 gigawatts hours. This represents more than the total consumption in the South when conditions are normal. It’s virtually the Northeast plus one third of the North. It’s a substantial decline in energy consumption,” the minister said during a video conference on Thursday (23).

The sum of the fall in the demand for fuels and the unexpected drop in oil prices have led to what Albuquerque dubbed “the perfect storm.” Amid such circumstances, only liquified petroleum gas increased, leading to shortages in some locations—an issues already tackled, the minister pointed out. “Supplies have been ensured. According to information I received yesterday, [distribution] has been practically normalized in every state,” he reported.

The circumstances, he went on to say, also led to the government to postpone electric energy auction that had been slated for this month.

“We don’t know exactly when this crisis will end and what its aftermath will be for each sector. Putting off auctions took no one by surprise. We’ll hold these auctions as soon as conditions allow us”, Albuquerque declared, stressing that, though exceptional, the crisis is “specific,” adding that action is being taken to ensure future supplies and sustainability in the energy field, preserving contracts and attracting new investment. “We’ve faced previous crises. Now, we need to consider the lessons we have learned in order to devise our plan,” he added.