By Brazil Stock Guide – Brazil’s antitrust authority has closed an investigation into Petróleo Brasileiro SA (PETR3 BZ; PETR4 BZ; PBR US) over alleged discriminatory practices in the supply of liquefied natural gas to thermal power plants during the 2020-2021 drought crisis.
In a decision issued on Monday (23), the General Superintendence of the Administrative Council for Economic Defense, known as Cade, determined that the evidence gathered did not demonstrate the materialization of conduct with potential anticompetitive effects in the markets reviewed.
The probe examined whether Petrobras had engaged in “anticompetitive discrimination” in LNG supply conditions, particularly toward merchant power plants operating in Brazil’s free energy market at a time of heightened reliance on thermal generation due to reduced hydroelectric output.
According to the ruling, the deterioration in domestic supply conditions during the period was strongly correlated with the surge in LNG prices on international markets. Cade said Petrobras’ arguments pointed to “economic rationality” behind changes in supply terms offered to merchant plants amid the hydrological crisis.
The authority noted that the company’s explanations were supported by quantitative data, regulatory references and evidence of isonomic commercial treatment among different market agents. It also stated that the justification for higher prices, linked to what it described as anomalous behavior in global LNG markets, was consistent with sector documentation produced at the time.
Cade emphasized that the dismissal does not prevent a future reopening of the case should new evidence of violations of the economic order emerge. “It is worth noting that this dismissal does not preclude a potential future investigation in the event new evidence of violations of the economic order arises that would justify the continuation of the inquiry. Archiving the case at this time is the measure of greatest administrative rationality, based on the principles of efficiency, public interest and proportionality set forth in Article 2 of Federal Law No. 9,784/1999, thereby avoiding the unnecessary expenditure of public resources on the investigation of a proceeding opened without consistent evidence,” the General Superintendence said.