Abstract
Brazil became self-sufficient in volume of crude oil. However, this has not reduced the dependence of foreign oil products. Brazil imports finished diesel, since its refineries lack hydro-refining units to produce the low-sulfur diesel needed. This paper uses an index decomposition approach to investigate the Brazilian import dependence on petroleum products from the demand side, focusing on today's most relevant oil product in the country: diesel. The three major diesel end uses in the country are decomposed, showing that freight transport is the most vulnerable end use, given Brazil's reliance on cargo movement to drive economic activity. This is, in turn, related to the large economic dependence on the export of primary products, including agricultural products. The demand side drivers for diesel consumption in Brazil analyzed in this paper, help direct demand-side policies to reduce the country's vulnerability to diesel imports.
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