Petrobras’ gain from expensive oil offsets loss from fuel lock, says bank

The crisis generated with the new change in command of Petrobras and the expectation of a lock in the price of fuel takes the state-owned company at a comfortable moment, with low lags in relation to the import parity.

But, for analysts at Goldman Sachs, even if international prices rise again and lags widen, the state-owned company’s profit from the sale of oil compensates for the loss of revenue from the sale of fuels below par.

The company will, however, have losses of up to US$ 1 billion (R$ 4.8 billion) per year if it has to import more expensive products to cover the deficit in the Brazilian market without readjustments to accompany any rise in international prices.

“Ebitda gain [indicador que mede a geração de caixa de uma companhia] of the exploration and production area more than compensates for the lower refining margins if gasoline and diesel prices remain at current levels”, say analysts Bruno Amorim, João Frizo and Guilherme Costa Martins.

They estimate that every US$10 (R$48) increase in oil guarantees Petrobras a positive effect of US$2 billion (R$9.6 billion) on the company’s Ebitda, even without increases in gasoline and diesel prices. In cash flow, the positive effect is US$ 1.3 billion (R$ 6.1 billion).

According to its projections, Petrobras’ refining area will have negative Ebitda with oil at US$ 130 (R$ 624) per barrel. Even so, the gain in the exploration and production area would help raise the company’s total Ebitda.

Even with the increase in international refining margins, the impacts are limited within the price projections, say analysts, considering that Petrobras will not have the obligation to import to supply the market share that domestic refining cannot meet.

The feasibility of imports is one of the arguments used by Petrobras management and the fuel sector in defense of prices in line with international quotations. They allege that private importers fail to act with high lags, which creates supply risks.

For Goldman Sachs analysts, Petrobras’ statute and the State-owned Companies Act reduce the chances that the company will act at a loss in fuel imports. But, if you have to do it without passing on to the final price, you will have billions in losses.

The analysts’ account considers that the discounts on domestic prices would be at the average level this year, 11% for diesel and 15% for gasoline.

According to data from Abicom (Brazilian Association of Fuel Importers), however, today the price of diesel is in line with international prices and, in the case of gasoline, the discount is 6%. The drop in lags reflects the appreciation of the real against the dollar and the decline in international quotations.

The possibility of fuel price locks has gained strength in recent weeks, first with the change in command of the MME (Ministry of Mines and Energy) and, later, with the resignation of José Mauro Coelho from the presidency of the state-owned company.

Less than five months before the elections, the matter began to be debated more openly in the government, which sees negative impacts from the rise in the assessment of President Jair Bolsonaro (PL). THE Sheet heard from high-ranking members that there are at least two measures under study.

One of them would establish ranges for the international price of oil – and, if the price of a barrel varies within the delimited values, the company would not be able to make adjustments. Another idea mentioned is a minimum interval of one hundred days for readjustments.

To change its pricing policy, however, the state-owned company needs to change its statute, which determines financial compensation from the government in case of loss-making operations to support public policies or operational losses, such as those related to the sale of fuel.