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Waves of regulatory reforms and winds of uncertainties in the Brazilian natural gas industry

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  • Diogo Lisbona Romeiro
  • Livia Amorim

Abstract

The natural gas industry in Brazil has undergone three waves of reforms since the late 1990s regarding liberalization and market opening. The gas law approved in 2021 reinforces the unbundling between transport and commercialization of natural gas and guarantees third-party access to essential infrastructure. The new legal framework achieves the vertical separation of upstream and midstream segments but does not reach the downstream segment subject to state regulations. The exit of the incumbent (Petrobras) from the network segments opens space for new entrants, but may remain with a high commercialization share. Vertical and horizontal integration in the distribution segment can compromise this industry’s restructuring. This article identifies three possible scenarios for the evolution of liberalization after the last reform. A successful path will depend on the implementation and enforcement of the new gas law, on adequate economic signals for network and consumption expansion, on harmonization of state regulations, and on the effective opening for the construction of a national gas market. The role of natural gas in Brazil’s energy transition is still an open issue that will affect the industry’s evolution in the coming years.

Suggested Citation

  • Diogo Lisbona Romeiro & Livia Amorim, 2022. "Waves of regulatory reforms and winds of uncertainties in the Brazilian natural gas industry," Competition and Regulation in Network Industries, , vol. 23(2), pages 153-179, June.
    • Handle: RePEc:sae:crnind:v:23:y:2022:i:2:p:153-179
    DOI: 10.1177/17835917221102892
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    References listed on IDEAS

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    Cited by:

    1. Delalibera, Bruno R. & Serrano-Quintero, Rafael & Zimmermann, Guilherme G., 2023. "Reforms in the natural gas sector and economic development," Economic Modelling, Elsevier, vol. 125(C).
    2. Bruno R. Delaribera & Rafael SerranoQuintero & Guilherme G. Zimmermann, 2023. "Reforms in the Natural Gas Sector and Economic Development," UB School of Economics Working Papers 2023/446, University of Barcelona School of Economics.

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