The Brazilian oil company Petrobras lowered the prices of gasoline and diesel this Tuesday, after announcing the end of its price policy linked to international prices, in line with the intention of President Luiz Inácio Lula da Silva to avoid sudden fluctuations that harm consumers.
“The announcement puts an end to the mandatory subordination to the import parity price (…) with a view to the best alternative accessible to customers,” the company, open capital but controlled by the State, explained in a statement.
Unlike Uruguay, there are importers in Brazil, in addition to Petrobras. Petrobras abandons the PPI to set prices according to what the competition presents.
Petrobras announced the reduction starting Wednesday of the liter of diesel by 12.7%, up to 3.02 reais (0.61 dollars), and 12.6% of the liter of gasoline, up to 2.78 reais (0.56 dollars) in the average price for distributors.
The company also provided a 21.4% reduction in the liter of LPG gas, used for cooking in homes of vulnerable families, when the cold begins in various regions of the country.
Lula had promised since the 2022 electoral campaign to “make Brazilian” Petrobras’ prices, dependent on a policy that, according to him, sought to “please shareholders to the detriment of Brazilians.”
This mechanism, implemented since 2016, consisted of maintaining the price parity of oil and derived fuels with the international market and the evolution of the dollar.
“I am particularly happy and I think the people will be too,” Lula said in a video posted on his social networks after the decision.
“More than a campaign commitment, it is a victory of the people (…). And it is only the beginning. We are going to invest in the industry and the generation of jobs,” added the president.
In January, after his inauguration, Lula appointed ex-senator Jean Paul Prates, a man he trusted, to be the company’s new president with the approval of the board. And the change began to take shape.
The new mechanism, “in addition to serving an adequate commercial policy (…) will make prices more attractive to the consumer and reduce the impact on inflation,” said the Minister of Mines and Energy, Alexandre Silveira, on Tuesday. at a press conference in Brasilia.
12-month inflation in Brazil eased in April for the tenth consecutive month, to 4.18%, according to official figures.
AFP
unexpected optimism
“With this business strategy, Petrobras will be more efficient and competitive,” Prates said.
“We are going to continue following the market references, without giving up the competitive advantages” of the company, he added.
Petrobras hinted that, although it will not be the only variable, “there will still be concern about international prices” of oil, which are currently around US$70 per barrel.
“There is no intervention, absolutely none,” Prates told reporters after meeting with Silveira. “The company’s competitiveness and profitability are fully guaranteed.”
The company stated in its statement that “the readjustments will continue to be carried out without a defined periodicity, avoiding passing the temporary volatility of international prices and the exchange rate to domestic prices.”
This reflects the objective of “not having such a volatile flow of readjustments throughout the year,” explained Bruna Sene, an investment analyst at Nova Futura Investimentos. But it will also “be monitoring eventual gaps” with the global market.
Earnings in sight
In 2022, the oil company made a record profit of about US$ 36,000 million, benefited from the global increase in oil prices.
Despite the new pricing strategy, analysts agree that Petrobras will not neglect its profitability.
During the government of the far-right Jair Bolsonaro (2019-2022), constant increases due to factors such as the war in Ukraine made the oil company a target of criticism. Bolsonaro changed the president of Petrobras three times.
Source: The Observer and AFP
