UPDATE 2-Brazil's robust gasoline consumption tests supply

Tue Dec 11, 2012 7:03pm EST

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RIO DE JANEIRO Dec 11 (Reuters) - Brazilians are using so much gasoline that it is te sti ng t he l imits on the c ountry's supply chain, fuel distributors association Sindicom said on Tuesday.

Even with anemic economic growth this year, gasoline consumption is set to climb 12.2 percent in 2012 above last year and is causing delivery delays to gas stations in some re mote and fas t-developing parts of the country, Sindicom's President Alisio Vaz said.

Vaz said growth models in the fuels sector long used to forecast demand have begun to break down.

"We have Chinese-level increases in gasoline sales that have decoupled from economic growth. It's been a big effort to keep the market supplied," he told journalists.

Total fuel sales -- including jet fuel, cooking gas and ethanol -- in the world's sixth largest economy, are rising 6.3 percent a year. The Sindicom numbers are preliminary estimates of 2012 consumption and will only be finalized next year.

Brazil, once one of the region's fastest-growing economies, is expected to grow just 1 percent in 2012. Growth has stalled in part from lack of roads, trains and ports. Infrastructure has not kept up with increasing automobile purchases.

The tiny northern state of Amapa recorded general fuel shortages this year, Vaz said, while some gas stations in other states in the remote Northeast were occasionally without fuel.

"We have bottlenecks in infrastructure that challenge gasoline and diesel delivery to the ports of the Northeast," he said. "Refineries are also at their limit in terms of production."

Vaz said fuel distributors increased investments in infrastructure and distribution to 1 billion reais ($481 million) in 2012 compared with 300 million reais in 2009 to meet the demand.

"We are talking about 20 percent growth in the demand for gasoline in the Northeast in 2012," he said. "It's hard to keep the country supplied with the same infrastructure we had 20 years ago."

Other states where the demand for gasoline will grow more than 20 percent this year include agricultural powerhouse Mato Grosso, Piaui and Maranhao.

Part of the reason behind the rapid growth in gasoline sales growth was a 10.4 percent drop in h ydrous ethanol consumption th is year. Hydrous ethanol fuels the country's flex-fuel car fleet that can also run on gasoline.

With the tighter supplies and higher cost of ethanol from the lackluster sugar cane crop this year, motorists of flex-fuel cars have migrated in mass to gasoline, exacerbating already tight supplies of the fuel.

The state-run oil company Petrobras is absorbing billions of dollars in losses annually from importing gasoline to make up for its refining shortfall on the domestic market. The government holds gasoline prices artificially low for consumers and Petrobras has to cover the spread between domestic and foreign prices.

Diesel consumption will probably rise 6.8 percent in Latin America's largest economy.

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