Petrobras will lead the expansion of its refining capacity, says the Minister of Mines and Energy.

(Reuters)- Brazil's new Minister of Mines and Energy, Alexandre Silveira, stated on Monday that expanding Brazil's oil refining capacity is urgent and that Petrobras, as a state-owned company, will play a central role in this objective, leading the process and encouraging other players to participate.

In his speech following the transfer of power in Brasília, which was released online, Silveira said that the country needs to implement a market design that promotes competition, but also protects consumers from the volatility of fuel prices.

"It's very difficult to explain to the Brazilian people that we are a paradise for biofuels, that we have the riches of the pre-salt layer, but that they will inevitably be at the mercy of international commodities or sugar in the international market," said Silveira.

According to the minister, the country's current deficient refining capacity "makes us hostage to the import of petroleum derivatives and natural gas, leaving the national market exposed to constant and abrupt fluctuations."

"It is urgent that we expand and broaden our refineries, taking them to different regions of the country and modernizing the plants. In this regard, Petrobras, as the state-owned driver of sectoral development and the largest refiner in the country, will naturally play a central role in the expansion, leading the process and encouraging the participation of other agents," he stated.

Silveira stated that the ministry and the future new management of the oil company "will work very closely together on the essential issues" for the country.

The minister also stressed that work will be crucial for the dissemination and proper use of natural gas produced in Brazil, highlighting that large volumes are reinjected or flared, while the country imports liquefied natural gas (LNG) at "stratospheric" prices.

The path to increasing the value of gas begins, first and foremost, with democratizing access for the entire industrial chain and for households, he stated, without going into details.

During his speech, Silveira also said that the ministry will seek to "revalue" biofuels through long-term policies committed to integrating these resources into the energy matrix in a safe and effective manner.

He said that this requires predictability and criticized the constant changes made to the mandatory percentage of biofuels in fuels sold at gas stations, stressing that the government will seek technical parameters to define what the ideal blend is.

ENERGY TRANSITION

The minister also announced the creation of a National Secretariat for Energy Transition, dedicated exclusively to structuring the public policies necessary to position Brazil as a world leader in clean energy, which he said should be one of the ministry's main challenges.

Natural gas and biomass, he stated, are particularly important in this context, in the pursuit of a medium- and low-carbon economy.

"The future of our generation should be guided towards innovation and the expansion of renewable energy sources," he stated.

Silveira also said that the government will fight diligently for a broad, structural, and lasting reduction in electricity tariffs, as well as ensuring that the social tariff reaches those who need it. According to him, the ministry will work to complete the "Light for All" program.

He also stressed that planning and security of supply cannot be neglected.

In the mining sector, Silveira stated that artisanal and small-scale mining should guide the ministry's actions, always taking care of environmental responsibility.

Silveira, from Minas Gerais, also stressed that "we will never forget Mariana and Brumadinho," referring to the deadly dam collapses in both cities in Minas Gerais, which resulted in a large number of deaths and widespread environmental impacts. According to him, the government will monitor the situation to prevent similar disasters from happening again.