Removal of Brazilian Subsidies to Back Out Clean Product Imports?

Brazilian transportation fuels subsidies have reduced costs for consumers, who have enjoyed longstanding market discount for gasoline and diesel. Currently the cost of the subsidy is borne by the state run oil company, Petrobras. As the cost of these imports is rising, the company is pushing for an end to price controls, a move which could reduce demand for clean product imports. Historically, until around 2010, Brazil faced a narrow gap between domestic demand and refining capacity, resulting in a modest amount of clean product exports. However, a trend of increasing miles driven per light duty vehicle has started rising quickly: 9,000 km/year in 2010, with forecasts of 13,000 km/year in 2015. The resulting increase in domestic demand was met by clean product imports, which peaked in 2011. Download here