Fuel price fluctuations often generate quick explanations: “it’s the time of year,” “there was a product shortage,” “there’s excess inventory.” Some make sense; others oversimplify a system that is interconnected and sensitive.
In Brazil, seasonality and inventories influence the market, but they rarely act alone. Below are myths and truths to read these movements more clearly.
Truth: seasonality changes demand — and that shows up in prices
There are predictable periods of higher consumption. Long holidays and vacations raise gasoline demand; harvest seasons and agricultural flows put pressure on diesel; winter tends to increase LPG consumption. When demand rises faster than replenishment, prices tend to react.
In Brazil, these effects are amplified by long distances, regional differences, and partial dependence on imports for certain products.
Myth: seasonality explains everything by itself
Even during “classic” periods of high demand, prices can remain stable — or even fall. This happens when:
- There are comfortable inventory levels in the system; - Refining operates with good availability; - Imports arrive at an adequate pace; - Logistics costs are under control.
In other words, the time of year is one piece of the puzzle, not the whole picture.
Truth: inventories act as a short-term buffer
Higher inventory levels help smooth consumption peaks or logistical delays. When product is available at terminals and distribution bases, the market gains time to adjust without passing on abrupt variations.
In Brazil, inventories are spread across refineries, distribution bases, and retail points, which creates different responses by region.
Myth: high inventory guarantees low prices
Full tanks do not automatically mean lower prices. Replacement costs, exchange rates, freight, and taxes continue to influence the final value. If the stored product was acquired at higher costs, that tends to show up in the price, even with full inventories.
How to read inventories without taking shortcuts
A few points help with better interpretation:
- Inventory is about volume and also replenishment timing; - Imports depend on logistical windows and international prices; - Regional differences can generate opposite scenarios in the same period.
Truth: logistics and refining modulate the effect of seasonality
Scheduled maintenance shutdowns, pipeline constraints, coastal shipping, and road transport influence how quickly product reaches the market. In times of higher consumption, any logistical bottleneck weighs more heavily.
In Brazil, the combination of local refining and imports makes logistical coordination a central factor in avoiding sharp fluctuations.
Myth: prices change only when there is a product shortage
Price adjustments also reflect expectations. If the market anticipates higher demand or more expensive replenishment, prices may move before a concrete shortage occurs. Likewise, signs of weaker demand can ease prices even without a physical surplus of product.
Truth: reading the movement requires looking at the whole set
Seasonality and inventories explain a relevant part of fluctuations, but the full picture includes international costs, exchange rates, logistics, and mandatory blending policies. In Brazil, understanding prices is less about a single cause and more about how several gears turn at the same time.
Separating myths from truths helps follow the market with less noise — and with more context.
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