Brazil Fuel Distribution: Replacement Margin Watch: April data points to even stronger margins

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Brazil Fuel Distribution: Replacement Margin Watch: April data points to even stronger margins

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Brazil Fuel Distribution

Replacement Margin Watch: April data

points to even stronger margins

Industry Overview

Margins sequentially expanding even post strong March 26 May 2026

April data confirmed a very encouraging momentum for fuel distributors, with margins Equity

continuing to expand even after an already strong March. In April, the replacement Latin America

margin – considering a feedstock mix of imports/ PBR – averaged R$0.29/liter (vs. Oil & Gas

R$0.24/liter in March). More importantly, the hypothetical margin for players Leonardo Marcondes >>

sourcing 100% from PBR rose to R$1.09/liter (vs. R$0.94/liter in March). Research Analyst

Merrill Lynch (Brazil)

Distributors expanded margins in all fuels +55leonardo.marcondes@bofa.com11 3140 4801

Margins improved across all fuels, with the expansion in the volume-weighted mix Isabella Simonato >>

largely driven by diesel. Ethanol also contributed positively, albeit from a smaller base. In ResearchMerrill LynchAnalyst(Brazil)

diesel, despite higher biodiesel blending costs and increased import feedstock prices, isabella.simonato@bofa.com

distributors were more than able to pass these costs through to end prices. In ethanol, Caio Ribeiro >>

Research Analyst

distributors cut prices by a smaller magnitude than the decline in hydrous ethanol Merrill Lynch (Brazil)

(ESALQ), which fell by around 22% in the month, and contributed to margin expansion. caio.ribeiro@bofa.com

Finally, the margin expansion in gasoline was mainly driven by lower blending costs with Nicolas Barros >>

anhydrous ethanol (-10% MoM). Meanwhile, gasoline A feedstock costs continued to Merrill Lynch (Brazil)