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By Sabrina Valle
(Reuters) -Brazil's Petrobras alerted the government last week that diesel pumps could run dry this year if the oil company does not sell fuels at market prices, according to four people close to discussions and an internal presentation seen by Reuters.
Just days later, President Jair Bolsonaro fired the chief executive of Petroleo Brasileiro SA, as the state-controlled company is formally known.
Bolsonaro's chief of staff said the president is "anguished" by rising fuel prices and the pricing policy at Petrobras needs to be more aligned with the government's thinking.
As Brazil enters a crucial window to secure diesel supplies, Petrobras management warned last week that the firm and other importers would struggle to secure diesel amid the most severe shortage of the fuel in 14 years, the sources said.
Analysts, private importers and officials at oil regulator ANP have echoed those concerns, said people familiar with the talks, who requested anonymity to discuss the politically sensitive matter.
The Petrobras presentation flagged the risk of shortage in the third quarter, when diesel demand surges seasonally in both the United States and Brazil, a major grains exporter expected to start shipping a bumper corn crop in August.
"If there is no signal of market prices ahead, there is material risk of a diesel shortage during the peak of demand during the harvest season, affecting Brazil's GDP," Petrobras said in the presentation titled "Fuels: challenges and solutions" and dated May 2022.
Petrobras did not respond to a request for comment.
Diesel supply has become a global concern since sanctions against Russia reshaped fuel trade and sent international inventories to historic lows. Importing countries are sizing up the risk of both rising costs and supply running short, as the industry shuts refineries for repairs or to cut carbon emissions.
Concerns in Brazil about diesel imports in the second half of the year rose after U.S. Gulf refiners, its major suppliers, started redirecting cargoes to Europe, two of the sources said.
"Global diesel inventories are far below the historic average," Petrobras said in the presentation shared with the Ministry of Mines and Energy. "Petrobras alone cannot solve the global rise of energy prices."
Energy Minister Adolfo Sachsida on Friday called oil analysts to ask about diesel shortages in the second half of the year, said a person directly involved in the matter. The ministry did not respond to a comment request.