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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
“—Supply—Petrochemicals 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 Brazil’s leading service station in 2008, with
BR-owned and franchised stations making 26.3% of Brazil’s
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
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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.”
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