Petrobras intensifies fuel cut announcements on the eve of the election

This Tuesday (30), Petrobras released a statement informing a 6.4% cut in the price of asphalt at its refineries. On Monday (29), it had already reported a reduction of 15.7% in the price of aviation gasoline and on Friday (26), of 10.6% in aviation kerosene.

It was the second cut in a row in the three products, which have their prices readjusted monthly. It was also the second time, at least since the beginning of the Jair Bolsonaro (PL) government, campaigning for reelection, that the changes were proactively disclosed.

Although the cuts follow international quotations, Petrobras has increased the frequency of public notices announcing the readjustments. The change began in July. The company says it wants to increase transparency.

In the first cut in aviation fuel and asphalt prices, announced in July, the state-owned company chose to make the disclosures in the same statement. Now, it has released the information on three different days, with almost identical texts, which explain the company’s pricing policy.

“The pricing method seeks balance with the market and follows the variations in the value of the product and the exchange rate, up and down, but without passing on the daily volatility of international quotations and the exchange rate”, says the text.

The drops were expected by the market, given the decline in international prices after the peaks of the first half, when the three products had highs in a row in the refineries.

The price of jet fuel, for example, rose every month between January and July, drawing criticism from airlines and putting heavy pressure on tickets.

The value of 50/70 asphalt cement, the main product of this segment, increased in February, April and July, directly impacting public works and highway concession contracts.

In none of the cases were the increases disclosed. The company claimed that the readjustments in these products are monthly according to the contractual formula negotiated with the distributors and that the percentages were routinely informed to customers.

For a person in the company’s senior management, the change in the communication of readjustments is motivated by the proximity of the elections.

In a note sent to Sheetthe company stated that, “with the objective of promoting transparency, Petrobras has adopted the practice of releasing public notices on fuel prices” and that the information is also available on its website.

After a semester of pressure on fuel prices, Bolsonaro is now counting on the decline in oil and the effects of tax cuts on gasoline, diesel and ethanol to try to reverse damage to his image on the eve of the election.

The topic is highlighted on Bolsonarista social networks and has already motivated visits to posts by the president himself and his ministers. In August, Petrobras had already announced two cuts in the price of diesel and one in the price of gasoline. At the end of July, there was another cut in the price of gasoline.

The president himself has publicized the cuts on his social networks and, on more than one occasion, has promised that Brazil will have one of the cheapest gasoline in the world.

The movements follow, in fact, the fall of international quotations. But the frequency of the announcements increased after Caio Paes de Andrade took office as president of the state-owned company, at the end of June.

Appointed by the Minister of Economy, Paulo Guedes, Paes de Andrade arrived at the company with the mission of securing readjustments during the electoral period, but his work was facilitated by the decline in international oil prices.

His appointment took place after a troubled process of change of command, which began with the resignation of José Mauro Coelho a little over a month after his inauguration, and faced questions in the internal committee that evaluates the curricula for the state-owned company.