This excerpt taken from the PBR 20-F filed May 22, 2009.
Distribution Key Statistics
At December 31, 2008, our BR network included 5,998 service stations, or 17.1% of the stations in Brazil. This total does not include the 784 stations in Northern, Northeastern and Northwestern Brazil that we acquired from Ipiranga in 2007, and which were incorporated into the BR network in April 2009. See SupplyPetrochemicals and Fertilizers. The integration of Ipiranga and its service stations into our network was approved by the Conselho Administrativo de Defesa Econômica, or CADE (Brazilian Antitrust Authority) in December 2008.
BR was Brazils leading service station in 2008, with BR-owned and franchised stations making 26.3% of Brazils retail diesel, gasoline, ethanol, vehicular natural gas and lubricant sales, according to the ANP. Most BR stations are owned by franchisees that use the BR brand name under license and purchase exclusively from us; we also provide technical support, training and advertising. We own 656 of the BR stations and are required by law to subcontract the operation of these owned stations to third parties.
The retail fuel market in Brazil is highly competitive and we expect that prices will be
subject to continued pressure. We seek to enhance profitability and customer loyalty by building on our strong brand image and providing superior quality and service. We believe that our market share position is supported by a strong BR brand image and by the remodeling of service stations and the addition of lubrication centers and convenience stores.
The primary fuel used in Brazil is diesel, which accounts for approximately 766.8 mbbl/d (45.5%) of the total Brazilian fuels market. By law, all diesel sold in Brazil from July 2008, was required to be at least 3% biodiesel; this proportion will be increased to 4% in July 2009. We acted as a catalyst for developing the new market by securing and blending biodiesel supplies and furnishing these to smaller distributors as well as our own service stations. Brazil is a global leader in the use of ethanol as a fuel for light vehicles. Today, 91.2% of new gasoline vehicles sold in Brazil have flexfuel capability, and service stations offer a choice of 100% ethanol as well as a blend of 25% ethanol and gasoline, as required by the regulator. Although we do not produce ethanol, we have supported the development of that market by distributing and wholesaling ethanol and by stimulating improvements in product quality.
Service stations in our network also sell vehicular natural gas. The number of stations offering this product increased to 453 in December 2008, from 409 in December 2007, and total gas sales in 2008 were 566 mmm3 (19,989 mmcf).
We also distribute oil products and biofuels under the BR brand to commercial and industrial customers. Our customers include aviation, transportation and industrial companies, as well as utilities and government entities, all of which generate relatively stable demand.
We also sell oil products produced by our Supply operations to other retailers and to wholesalers.
Our LPG distribution business, Liquigas Distribuidora, held a 22.3% market share and ranked third in LPG sales in Brazil in 2008, according to the ANP.
We participate in the retail sector in other Latin American countries through our International business segment. See International.