Ministry of Economy wants release of fuel delivery in Brazil

As a way to increase competition in the sector, the Ministry of Economy has been publicly defending that gas stations be authorized to refuel vehicles outside the establishments, in the delivery mode. The service, already practiced in other countries, is prohibited in Brazil by resolution of the National Agency for Petroleum, Natural Gas and Biofuels (ANP). The justification is the difficulty that the model would generate for product traceability and inspection of resellers.

Technicians from the department headed by Paulo Guedes argue, based on the Economic Freedom Law, that “the existence of demand and the possibility of offering or supplying products with safety and quality are enough reasons not to impede free business initiative” .

The law, sanctioned in 2019 by President Jair Bolsonaro (no party), creates the figure of regulatory abuse, an offense committed by the public administration when it issues a rule that “affects or may affect the exploitation of economic activity”.

Fuel delivery has already been carried out in a restricted manner in the city of Rio de Janeiro. After starting to offer the service without the consent of the ANP, Delft Serviços (later renamed Gofit) was authorized by the agency in March 2020 to operate the modality on an exceptional basis, as a pilot project. The performance, which lasted until May 2021, was restricted to the neighborhoods of Barra da Tijuca, Recreio dos Bandeirantes and Vargem Pequena.

The operation was similar to that of a food delivery service. Through a smartphone application, the user registered one or more vehicles and indicated the location, time, value and type of fuel (regular gasoline or ethanol) that he wanted to supply. Payment was made by credit card directly on the platform. At the scheduled time, a tanker would travel to the car and supply it.

One of the arguments that allowed for the implementation of tests was the possibility of tracking offered by the technology. The activity was monitored by the ANP through monthly reports with data on supplies, in addition to inspection actions. Based on the experience, the agency established a series of conditions for the eventual release of the service.

These rules are provided for in the draft of a resolution of the regulatory body submitted for public consultation. According to the text, the operation can only be carried out by gas stations that are already authorized and after a specific grant, with operations restricted to the limits of the municipality and in urban areas. The transport vehicle can carry a maximum of 2,000 liters of up to two types of fuel (common gasoline and ethanol) in separate tanks. Transport of diesel would not be allowed.

The supply itself cannot be done in places with semi-permeable or permeable floors, garages, underground areas, high-flow public roads or when the operation implies non-compliance with traffic rules, such as the need to stop in a double row or in an area in that parking is fenced.

Authorization for out-of-station supply would require a series of documents, such as a risk management analysis study, national registration of road freight transport (RNTRC) issued by ANTT, operating license issued by an environmental agency, annotation of technical responsibility with collection with Crea, inspection certificate for the transport of hazardous products issued by Inmetro, registration of environmental regularity, accident insurance for the activity, among others.

Abroad, there are examples of countries that authorize this type of service. A survey by the ANP cites companies such as the British Zebrafuel and the Indian MYPetrolPumP, Pepfuel and Fuel Buddy, which deliver diesel, and CAFU, which serves in Dubai, in the United Arab Emirates, with delivery of gasoline. In the United States, the activity has existed since at least 2016, with companies with regional operations, such as Exfill, Filld, Yoshi, Booster and Neighbourhood Fuel.

Different teams from the Ministry of Economy have already manifested themselves in defense of the modality’s release. In a technical note from July, the Department of Evaluation, Planning, Energy and Lottery highlights that the technology is already commonplace in deliveries “and, perhaps, will result in an even greater control of the supply activities of the fuel delivery solution, brought about by through the expansion of the use of cell phones and already present in other countries like the United Kingdom, USA, United Arab Emirates and India”.

In another opinion, the Special Secretariat for Productivity, Employment and Competitiveness, considers that the delivery of fuels “is a new possibility of business arrangement, even enabling contestability to locations where there is abuse of economic power in the resale.” The folder also defends that the service is released without restriction to the limits of the municipality where the resale station is located.

The change would be another measure to increase competitiveness in the sector, after the recent release of ethanol purchases by stations directly from the mills and the sale of fuel from other distributors by branded resellers.

The so-called regulatory tutelage of loyalty to the flag was also the subject of public consultation by the ANP, but before the regulatory body took any decision on the matter, the Ministry of Economy published a provisional measure, in early August, removing restrictions on purchases of fuels by dealers.

THE People’s Gazette, the Ministry of Economy informed, however, that “there is no other study or elaboration of other legal or infra-legal normative act on the subject in progress in the scope of the Evaluation, Planning, Energy and Lottery Secretariat (Secap), besides the proposal of change made by the ANP within the scope of Public Consultation No. 7/2021”.

The ANP, in turn, informed that it is analyzing the contributions received during the public consultation. According to the agency, for the time being there is no forecast for the publication of the new rules.

Distributors and associations are against the proposal

Despite the government’s favorable opinions, several entities are against the release of fuel delivery under the terms proposed by the regulatory agency. Distributors such as BR, Ipiranga, Raízen and Atem are opposed to the draft because, among other reasons, it generates operational and environmental risks, difficulty in inspection and risk of tax evasion, without sufficient compensation in terms of competition, according to them.

The Brazilian Association of Independent and Free Fuel Dealers (AbriLivre) says that the obligations imposed in the proposed resolution of the body “are absolutely impractical for a post that complies with the law and the norms of the ANP, which, in practice, would make the adoption of the delivery without the risk of injuring any of these obligations”.

The entity questions, for example, the sealing of supply in garages and, at the same time, the need for the procedure to take place in areas with impermeable floors, since this type of floor is usually found precisely in garages.

The prosecutor Glauber Tatagiba, from Procon of Minas Gerais, considers that the modality “does not bring benefits to the consumer, it puts safety and the environment at risk and can facilitate tax evasion, as well as adulteration of the product”.

The Brazilian Association of Port Terminals (ABTP) also opposed the measure, considering that the model could expose third parties to liability for possible environmental contamination and damage to public safety.

The Union of Retail Trade of Oil Derivatives, Natural Gas and Biofuels, Convenience Stores, Car Wash and Parking Lot of Santos and Region (Resan) says it has no objections to the delivery itself, but that the conditions proposed by the agency would be insufficient to control the risks of damage to the environment, the consumer, tax collection and competition itself.

An opinion produced by the Energy Economics Group (GEE), of the Institute of Economics of the Federal University of Rio de Janeiro (UFRJ), concludes that, even if the ANP requires an extensive series of guarantees from interested agents and places a series of restrictions , the authorization of the activity tends to increase the costs of inspection of fuel quality and generate insecurity for the supply activity.

“Other solutions, such as the development of applications that accurately inform fuel prices as well as the assessment of gas stations by consumers on pre-defined routes (work-home, for example) have the potential to increase competition without increasing prices. regulatory costs,” say authors Helder Queiroz Pinto Jr. and Marcelo Colomer Ferraro.