AM congressmen and oilmen try to dialogue with Cade and STF to stop the privatization of the only refinery in the Northern Region

Contract for the negotiation of the Isaac Sabbá Refinery (Reman) and its logistic assets was signed, in August 2021, for R$ 994 million (Geraldo Kosinki/ Agência Petrobras)

June 29, 2022

15:06

Marcela Leiros – Amazon Agency

BRASILIA – Oil workers and parliamentarians from the Amazonas State participated on Tuesday, 28, in the third public hearing held in Congress to discuss and demonstrate the impacts of the sale of the only refinery located in the Northern Region of the country, the Isaac Sabbá Refinery (Reman), to the Atem Group. The goal now is to dialogue with the Administrative Council for Economic Defense (Cade) – which temporarily suspended the approval of the sale process – and the Federal Supreme Court (STF). The refinery belongs to Petrobras.

The sale was discussed in an extraordinary public hearing of the Mines and Energy Commission of the House of Representatives. Last week and in March, other hearings were held with one purpose: to present to the parliamentarians the impact of the sale of the refinery and seek solutions together to reverse the privatization process, as explained the coordinator of the Amazonas Oil Workers Union (Sindipetro-AM), Marcus Ribeiro.

“The main idea of our public hearings is to have this accumulation of discussion, present to the parliamentarians the impact that will have if our Manaus refinery is sold, that it has not been sold yet, the sale process has not been completed, and articulate ways to be able to stop this process”, Ribeiro said.

Lawmaker Sidney Leite with oil tankers in the House of Representatives, in Brasília (Marcela Leiros/ Revista Cenarium)

The coordinator pointed out, still, that one of the requirements is that the process is done in a transparent manner and that are “put in the balance” the impacts for the Amazon and the Northern Region. According to the Intersyndicate Department of Statistics and Socioeconomic Studies (Dieese), Reman alone is responsible for approximately 17% of the total tax collection in the state and 19% of the total of the Tax on Circulation of Goods and Services (ICMS).

“Through lawmaker Zé Ricardo, together with senator Jean Paulo, that deputy Sidney Leite also attended a meeting at the TCU [Federal Audit Court], to show the TCU minister the impacts of the sale of the Manaus refinery and the process that this is taking place, in a very intransparent way, just wanting to deliver our refinery to the private market, without discussing the consequences of this process. We hope to leave here with this forwarding, to try a new dialogue with Cade, to try a conversation with the minister of the STF, so that we can show what was discussed here and the impacts for our region”, he concluded.

Cade approved, in May, without restrictions, the acquisition of Reman by Ream Participações, of the Atem Group. However, after the approval, Counselor Lenisa Rodrigues Prado, from CADE’s Tribunal, asked the collegiate to re-analyze the process of the sale of Reman. This is the current status of the process.

Parliamentarians react

Attended the public hearing the federal deputies for Amazonas Sidney Leite (PSD), José Ricardo (PT) and Marcelo Ramos (PSD), as well as a representative from Dieese, Sindipetro-AM, the Single Federation of Oil Workers (FUP), the Institute of Strategic Studies of Petroleum, Natural Gas and Biofuels (Ineep) and Petrobras.

“I am particularly going to provoke the Cade, I will even request that the bench be able to do this in a unified way, because the justification for the privatization of the refinery, quite the contrary, does not protect the consumer’s interest, it puts it in check. And here we are talking about institutions such as Dieese, which clearly shows this, such as Ineep, including references and experiences of what has already occurred in Bahia, which was the increase in the price of the oil derivative”, said the congressman, adding the concern with a monopoly in the Amazon region.

“This is also our concern, because we don’t have another refinery nearby, and the monopoly in the Amazon region is everything we don’t need”, he added.

The third hearing in Congress took place this Tuesday, 28th (Marcela Leiros/Revista Cenarium)

Understanding the case

The refinery has the capacity to supply the consumer market in the states of Pará, Amapá, Rondônia, Acre, Amazonas, and Roraima. Among Petrobras’ arguments for the sale are the increase in competition and the reduction in fuel prices. However, specialists indicate that the privatization will form a private monopoly in the region, offering risks of shortages and no guarantee of increased competitiveness and higher prices for the final consumer.

The sale value of the refinery was also questioned. Reman was sold for US$ 189 million, when the market value is US$ 279 million. The refinery produces LPG – the cooking gas -naft petrochemicals, gasoline, aviation kerosene, diesel oil, fuel oils, asphalt and oil for power generation. “The Northern Region depends heavily on the products produced by Reman, or imported by it”, emphasized economist and Dieese technician Carlos Takashi.

The data also show that between 2010 and 2014, the percentage of use of Reman was approximately 90%. In 2020, it reached 59.5% and, in 2021, it rose a little to 66.2%. “The behavior of the quantity produced and the utilization rate of Reman shows a loss of interest by the current management of Petrobras to continue operating, with a drop in the load processed since 2016”, he concluded.