The April 2026 edition of Short-Term Outlook for the Brazilian Fuel Market, published by the Energy Research Office, brings an important signal for those monitoring Brazil’s energy sector: national demand for liquid fuels and LPG is expected to grow by more than 3 billion liters in 2026 and repeat a similar expansion in 2027. According to EPE itself, this advance reflects the dynamism of economic activity and the vitality of the domestic market.
This figure deserves attention because it goes beyond a short-term reading of consumption. It points to a structural reality in the country: even amid the expansion of renewable sources, the gradual electrification of end uses and the maturation of the ESG agenda, Brazil will continue to demand significant volumes of liquid fuels in the short term. This finding does not weaken the energy transition. On the contrary, it makes the need for a pragmatic, planned transition, connected to the real infrastructure of the economy, even clearer.
According to EPE’s consolidated table, the total market considered in the study, composed of total diesel oil, gasoline C, hydrated ethanol, aviation kerosene and LPG, is expected to rise from 162.0 billion liters in 2025 to 165.3 billion liters in 2026 and 168.7 billion liters in 2027. In percentage terms, the projection indicates growth of 2.0% in 2026 and a further 2.0% in 2027.
This expansion is not occurring uniformly across the different products. Total diesel oil remains the main component of demand, with a projected 72.0 billion liters in 2026 and 73.7 billion liters in 2027. Gasoline C is expected to reach 47.7 billion liters in 2026 and 48.3 billion liters in 2027. Hydrated ethanol, in turn, is projected at 23.6 billion liters in 2026 and 24.4 billion liters in 2027, while aviation kerosene is expected to advance from 7.5 billion to 7.7 billion liters over the same period.
In the case of LPG, the analysis requires specific attention. EPE projects demand of 8.0 million tonnes in 2026 and the maintenance of this level in 2027. The publication also highlights the influence of the Gás do Povo program, associated with expanding access to cooking gas cylinders for low-income families, as one of the drivers of consumption growth in 2026. According to the Ministry of Mines and Energy, the program aims to serve more than 15 million families and provides for the distribution of 65 million gas cylinders per year.
This point is central to Brazil’s energy analysis. LPG cannot be viewed only as a market variable. It is also part of the agenda for energy inclusion, food security, public health and quality of life. In many households, access to cooking gas reduces dependence on more precarious sources for food preparation. Therefore, when demand for LPG grows, there is also a social dimension involved that must be considered in the design of public policies and in the assessment of the energy matrix.
At the same time, the projection reinforces a common tension in emerging economies: the energy transition must coexist with rising demand. Countries such as Brazil cannot simply import a narrative of accelerated substitution without considering income, logistics, infrastructure, territory and production profile. The advance of renewables is essential, but security of supply remains a basic condition for economic stability.
Diesel is the clearest example of this reality. Its weight in the fuel matrix is directly related to freight transport, agriculture and livestock, mining, civil construction and the logistics of goods distribution. When diesel demand grows, it often signals economic activity, the movement of goods and investment in construction projects. But it also highlights the scale of the challenge of decarbonizing heavy transport, a segment in which electrification still faces significant technical, economic and operational barriers.
In this context, biofuels, biomethane and hybrid solutions gain strategic importance. The discussion is not limited to replacing one technology with another, but to building a portfolio of decarbonization pathways. Brazil has relevant competitive advantages in this field, especially due to its accumulated experience with ethanol, biodiesel, bioenergy and the use of agro-industrial waste. The issue is transforming this potential into scale, regulatory predictability and investment capacity.
Gasoline C and hydrated ethanol also reveal Brazil’s specificity. The presence of ethanol in the vehicle fuel matrix makes the country an international benchmark in renewable fuel for light vehicles. By projecting growth for both gasoline C and hydrated ethanol, EPE indicates that the Otto cycle will remain relevant in the short term, but with room for competition between fuels, influenced by relative prices, disposable income, the sugar-energy harvest and blending policy. The publication itself considers gasoline C and hydrated ethanol as Otto-cycle fuels, without including natural gas vehicles in this category.
For investors and companies in the sector, this scenario brings a clear message: the Brazilian fuel market continues to expand, but this expansion will increasingly be analyzed through the lens of efficiency, carbon intensity and energy security. It is not enough to project volume. It will be necessary to understand the quality of this demand, its origin, its elasticity and its compatibility with climate and regulatory commitments.
Aviation is another relevant point. Aviation kerosene is expected to grow over the short-term horizon, following the recovery and expansion of air transport. This movement is taking place at a time when the global sector is discussing the advancement of sustainable aviation fuels, known as SAF. For Brazil, this could be an industrial and energy opportunity, considering the availability of biomass, waste and technological routes associated with the production of lower-carbon-intensity fuels.
However, the expansion of demand for aviation kerosene also reinforces the importance of planning. Aviation is a hard-to-abate sector, with more severe limitations for large-scale electrification. For this reason, incentive policies, sustainability certification, logistics infrastructure and integration with national production chains will be decisive factors in transforming potential into competitiveness.
A cross-cutting reading of EPE’s report shows that Brazil is experiencing a phase in which economic growth, energy inclusion and the low-carbon transition must be addressed in an integrated way. The projected increase of more than 3 billion liters per year should not be interpreted as an automatic contradiction to the climate agenda. It should be read as a call for planning. Demand exists, will continue to grow and will need to be met with greater efficiency, lower carbon intensity and smarter regulation.
This is an important distinction. A simplified view of the energy transition tends to oppose fuels and renewables as if they were isolated fields. In practice, the energy system operates through interdependence. Renewable electricity is advancing, but mobility, industry, agribusiness, logistics, aviation and residential consumption still depend on multiple sources. The challenge lies in reducing emissions without compromising supply, competitiveness and inclusion.
The very nature of EPE’s publication confirms this need. According to the company, the Short-Term Outlook for the Brazilian Fuel Market is a bimonthly publication that presents projections for monthly sales of the main petroleum products and biofuels by distributors in Brazil, with the aim of reducing information asymmetries and providing input for decision-making by energy-sector agents.
For the private sector, this type of information is essential. Distributors, producers, generators, traders, logistics operators, investors and project developers need predictability to make capital decisions. The expansion of demand for liquid fuels and LPG affects storage infrastructure, transport, imports, domestic production, stock formation, contracts, prices and energy diversification strategies.
For the public sector, the report also offers relevant input. Energy policy must balance objectives that do not always move at the same pace: affordable prices, security of supply, tax revenue, social inclusion, emissions reduction, regional development and investment attraction. The quality of planning lies precisely in recognizing these tensions and building instruments capable of guiding the market without creating unnecessary disruptions.
The advance of LPG under the influence of social programs is a concrete example. Additional demand may strengthen energy inclusion, but it also requires attention to logistics, budget, supply and impact monitoring. Likewise, diesel growth may reflect a more active economy, but it calls for consistent policies for fleet renewal, transport efficiency, railway expansion, advanced biofuels and the use of biomethane in logistics corridors.
In the ESG field, EPE’s data should also be interpreted with maturity. Companies with climate targets cannot ignore the projected increase in fuel consumption. On the contrary, they should incorporate this scenario into their risk analyses, supply planning, emissions inventories, mitigation strategies and investment decisions. The strongest ESG agenda is one based on real data, not convenient narratives.
This means that the growth in fuel demand in Brazil imposes a more sophisticated energy-transition agenda. The country is not starting from the same matrix as economies highly dependent on coal, nor from a fully electrified infrastructure. Brazil has a mostly renewable electricity matrix, extensive experience in biofuels and great potential for biogas, biomethane, low-carbon hydrogen and sustainable fuels. But it also faces logistics challenges, regional inequalities and strong dependence on road transport.
The opportunity lies in using these characteristics strategically. Rising demand can stimulate investments in renewable fuels, energy efficiency, low-carbon infrastructure and the gradual replacement of more emissions-intensive sources. It can also strengthen national chains linked to agribusiness, sanitation, waste, the chemical industry and transport. But this will depend on stable regulation, appropriate economic signals and coordination between energy planning, industrial policy and climate commitments.
EPE’s projection for 2026 and 2027, therefore, should not be seen merely as a market number. It is a portrait of Brazil’s real economy. It shows a country that grows, consumes, transports, cooks, flies, produces and keeps moving. At the same time, it shows a country that needs to accelerate the transition without losing sight of energy security.
The challenge in the coming years will be to qualify this growth. Additional demand for liquid fuels and LPG will come. The strategic question is how to meet this demand with greater efficiency, a larger share of renewable alternatives, better infrastructure and lower carbon intensity. For Brazil, the energy transition will not be built by denying reality, but by the ability to transform it with planning, technology and a long-term vision.
