Home Gas Distribution in Brazil
Liquefied Petroleum Gas, or LPG, is still widely used throughout Brazil for cooking and heating. In this article we will learn more about the distribution of gas and how it is done in Brazil.
To meet the wide range of consumers, companies provide delivery services made by trailers, trucks and even motorcycles. LPG can be distributed in bulk, canisters or through a gas piping system. While canisters are sold for smaller demands for example for homes, gas in bulk is bought by companies, restaurants and residential buildings that consume higher quantities of gas.
Market Size
As of 2014, gas has a wide distribution network. It combines 21 distributors and 48.000 sellers, trading 100 million canisters and serving 42 million homes. This market generates 350.000 direct and indirect jobs. This network covers the entire Brazilian territory and ensures the supply of 95% of households.
According to data provided by Sindigás, 7.3 million tons of gas were sold in Brazil in 2013. Of these, 2,1 tons corresponded to gas in bulk.
Distribution
The distribution of gas canisters or gas cylinders is mainly made through a fleet of lorries or trucks, but it is also possible to find motorcycles that deliver around the cities. Gas delivery vehicles are remarkable for the typical song that they play, which attracts customers. When consumers hear the song, if they want to buy gas, they just have to wait for the vehicle to drive by and ask them to stop.
The vehicles drive around regions with a high concentration of buildings and restaurants that require 45 kg cylinders, while motorcycles make home deliveries of 13 kg canisters. Fast delivery is a necessary feature for these distributors companies.
The price of gas is determined by Petrobrás, which increased the price of LPG sold in bulk by 15% in 2014. However, for cooking gas there is no set fixed price. That means that the prices are determined by the distributor.
Main Players
There are only a few large gas distributors in Brazil because ANP - the National Agency for Petroleum, Natural Gas and Biofuels - controls the number of gas canisters of each of these distributors.
Ultragaz
Ultragaz operates nationally distributing LPG to residential customers through its own retail stores, third-party stores and also through its fleet of trucks. The sales happen through door to door service or through scheduled delivery.
This company is the largest distributor in Brazil, with 23% of the market share. Ultragaz distributes LPG to approximately 10,5 million households in the canister segment and more than 40 thousand clients in the bulk segment. In Bahia, the company operates under the Brasilgás brand.
Copagaz
Copagaz is a Brazilian company specialized in the cooking gas sector. It originated in the state of Mato Grosso do Sul. Copagaz is headquartered in São Paulo and belongs to the Zahran Group, also owner of the Mato Grosso Television Network, an affiliate to Rede Globo. Copagaz distributes about 40.000 tons of cooking gas per month.
Liquigás
Liquigás Distribuidora is a Brazilian company owned by the Petrobras Group. In addition to the gas for domestic use, Liquigás provides bulk gas to various industry sectors, commercial and agriculture as well as to condominiums and hotels.
Liquigás has built one of the largest marketing networks and distribution of LPG in the country and is present in 23 states in Brazil. Liquigás has approximately:
- 3 250 employees
- 26 industrial units of canister service
- 19 storage tanks
- 21 million cylinders of 13 kgs
According to ANP, Liquigás had participation of 22.3% in the LPG market in 2010.
Piped Gas
Piped gas consumed in households, companies and industries, is a public utility service which has rules that are defined by state regulatory agencies.
The coverage of Brazilian homes with piped gas is still minor, with an average of 3% of households using this service. According to the company Gas Natural Fenosa, Rio de Janeiro is the state with the most coverage, with 25% of the household served by piped gas.
The company responsible for piped gas in the state of São Paulo is Comgás. The state company covers 71 municipalities and distributed over 5,5 billion m³ in 2014. Sulgás is responsible for distributing piped gas for the state of Rio Grande do Sul and supplies 38 municipalities, covering 865 kilometers. The only states that do not receive piped gas are Tocantins, Roraima and Acre.