ACCESS TO LP GAS FOR LOW INCOME ACCESS TO LP GAS FOR LOW INCOME HOUSEHOLDS HOUSEHOLDS

Paolo Ditta - LiquigásPaolo Ditta - LiquigásOctober 2009October 2009

22

Brazil: 8.5 MM Brazil: 8.5 MM km² km²

2222

Brazil, a continental-wide countryBrazil, a continental-wide country

Europe: 10.4 MM Europe: 10.4 MM km² km²

190 million 190 million inhabitantsinhabitants

730 million 730 million inhabitantsinhabitants

33

LPG is present at 100 percent of Brazilian municipalities

3333

LPG in BrazilLPG in Brazil

* Source: IBGE and ANP 2008

Annual Consumeper inhabitant

25.8 kg*

Broader than Electric Power and Water

5,563 municipalities

37,000 Authorized Distributors

44

LPG in BrazilLPG in BrazilDistribution under Normal ConditionsDistribution under Normal Conditions

4444

55555555

LPG in BrazilLPG in BrazilDistribution under Extreme ConditionsDistribution under Extreme Conditions

Foto original

PortabilityPortability

66

LPG AvailabilityLPG Availability

Since LPG is always available within the

Brazilian Territory, why is its use so low?

777777

LPG in BrazilLPG in Brazil

2000 2001 2002 2003 2004 2005 2006 2007 2008

Consume directly related to income

LPG P-13 Consume – million tons. P-13 Compared to Minimum Wage - %LPG Consume – Kg/inhabitant/year

5.05.0 4.94.9

4.74.7

4.64.6

4.84.8 4.84.8

4.84.8

4.94.9

4.94.9

13%13%

10%10%

12%12% 12%12% 12%12%

10%10% 9%9% 9%9%

8%8%

29.529.5 28.728.727.127.1

25.925.9 26.326.3 25.925.9 25.925.9 25.825.8 25.725.7

Source: Empresa de pesquisa energética - EPE |MINISTÉRIO DE MINAS E ENERGIA -MME

888888

LPG in BrazilLPG in BrazilFirewood in the Brazilian Energy PortfolioFirewood in the Brazilian Energy Portfolio

48.2

35.1

26.2

26.5

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Firewood - % LGP - %

Residential Sector

Source: Balanço Energético Nacional 2008 |Year base 2006

99

Lack of proper credit Lack of proper credit instrumentsinstruments

Consume BarriersConsume Barriers

P-13 cylinder cost is high for P-13 cylinder cost is high for low-income people low-income people

1010

Flex StoveFlex Stove

Consume BarriersConsume Barriers

1111

Flex StoveFlex Stove

Consume BarriersConsume Barriers

12121212

North and Northeast ConsumeNorth and Northeast Consume

Source: Authorized Fuel Distributors in accordance with ANP Administrative Rule ANP 202/99.

Notes: Data source before 2006: Product Control Statement (Demonstrativo de Controle de Produtos - DCP). From 2007: Data from Products Movement and Information System (Sistema de Informações de Movimentação de Produtos – SIMP).

Before 2006 information considers sales, including distributors’ consume. From 2007 only sales is considered.

2000 2001 2002 2003 2004 2005 2006 2007 2008

LPG Consume in thousands of tons

NORTH

NORTHEAST339339 343343

324324297297 307307 310310 321321

361361374374

1,4141,414 1,4311,4311,3481,348

1,2341,2341,2901,290 1,3041,304

1,3551,3551,4011,401

1,4531,453

13131313

LPG ConsumeLPG ConsumeAverage Annual GrowthAverage Annual Growth

Source: ANP

North

2000-2005-2.30%-2.30%

2005-2008+3.30%+3.30%

Northeast

2000-2005-1.96%-1.96%

2005-2008+3.03%+3.03%

Southeast

2000-2005-0.20%-0.20%

2005-2008+0.05%+0.05%

South

2000-2005-0.90%-0.90%

2005-2008+0.18%+0.18%

Central-West

2000-2005-1.00%-1.00%

2005-2008+1.05%+1.05%

Brazil

2000-2005-0.94%-0.94%

2005-2008+1.08%+1.08%

GDP Brazil

2000-2005+3.05%+3.05%

2005-2008+4.53%+4.53%

1414

Consume ImpulseConsume ImpulseNorth and Northeast RegionsNorth and Northeast Regions

Economic growth generates employment growth

Supplementary income through governmental mechanisms

– Example/For instance: Family Grant Program

1515

Consume ImpulseConsume ImpulseGovernment Role in the Problem Resolution Government Role in the Problem Resolution

Tax reduction for home appliance products

1616

Consume ImpulseConsume ImpulseLiquigás Role in the Problem ResolutionLiquigás Role in the Problem Resolution

P-08

P-05

1717

Sector Future ChallengesSector Future Challenges

To develop mechanisms in order to grant subsidies to those who cannot afford the use of LPG.

To ensure that subsidies are properly spent on LPG

Microloans for low-income people

1818

SafetySafety

BenefitsBenefits

Public Health Public Health Cost ReductionCost Reduction

End of Indoor End of Indoor PollutionPollution

Paolo Ditta - LiquigásPaolo Ditta - LiquigásOutubro 2009Outubro 2009

Liquigás is a Company of Petrobras’ SystemLiquigás is a Company of Petrobras’ System