Socioeconomic Impacts of a Diesel Shortage on the Brazilian Economy: An Input-Output Analysis

Abstract

This paper estimates the potential impacts of a possible diesel shortage on the Brazilian economy. To this end, an input-output model integrated with linear programming procedures is used to simulate direct, indirect, and induced effects on income and job creation. The results reveal significant socioeconomic implications for short periods (10 days) of restricted availability and point to significant potential losses due to the characteristics of the productive structure, particularly those relating to the transport sector. More specifically, the results show a potential impact of reducing Brazilian GDP by R$76.28 billion, equivalent to 1.5% of 2015 GDP. Estimates show a potential drop that could reach 1.8 million jobs. The evidence obtained contributes to guiding public energy planning policies and draws attention to the need to build strategic diesel stocks.

Keywords:
Input-Output Matrix; Shortage; Productive linkages; Income and Employment