Straightforward FAQ: seasonality and inventories — why fuel prices vary in Brazil

Fuel prices in Brazil do not change for a single reason. Two factors appear all the time in explanations: seasonality and inventories.

Below is an FAQ with direct answers to understand why gasoline and diesel go up and down throughout the year, without technical terms.

What is seasonality in the context of fuels?

Seasonality is the effect of times of the year on production, consumption, and logistics. In certain periods, demand increases; in others, supply becomes tighter.

In Brazil, this appears, for example, when: - Consumption grows during holidays and vacations. - Ethanol production varies according to the sugarcane harvest. - Diesel is used more during harvest and agricultural transport periods.

Why do inventories influence prices so much?

Inventories work like a “cushion.” When they are high, they help absorb consumption peaks. When they are low, any increase in demand weighs more heavily on prices.

Smaller inventories can mean: - Less room to deal with unforeseen events. - Greater sensitivity to logistical delays. - Faster market reactions to changes in consumption.

Does low inventory always mean an immediate increase?

Not necessarily. The impact depends on other factors at the same time, such as imports, refining pace, and local demand.

Lower inventory tends to increase the chance of fluctuations, but it does not guarantee an automatic pass-through to pump prices.

How does the ethanol harvest factor into this?

The harvest influences ethanol supply, which competes with gasoline in Brazil. During the harvest, supply is usually higher; outside of it, lower.

This can affect: - Ethanol prices at the pump. - The price relationship between ethanol and gasoline. - Gasoline demand in certain periods of the year.

Does diesel also experience seasonality?

Yes. Diesel is closely linked to economic activity and the agricultural calendar.

During planting and harvest periods: - Consumption increases. - Logistics become more intense. - Inventories can be pressured regionally.

Do holidays and vacations really make a difference?

They do, especially for gasoline. During long holidays and school vacations, the use of light vehicles increases.

This temporary increase in consumption can: - Reduce local inventories. - Raise distribution costs. - Generate punctual price adjustments.

Why aren’t variations the same across all of Brazil?

Because the country is large and logistics matter. Inventories, demand, and costs change from region to region.

Common differences include: - Distance from refineries and ports. - Local storage capacity. - Intensity of consumption in each area.

Is it possible to predict when prices will change?

It is possible to identify more sensitive periods, but not to pin down dates or values. Seasonality and inventories indicate trends, not fixed outcomes.

Understanding these factors helps explain fluctuations, even when they seem to happen “out of nowhere.”