Cade will investigate whether Petrobras sells more expensive oil to private refiners

Cade (Administrative Council for Economic Defense) opened an administrative inquiry to determine whether Petrobras is charging more for oil sold to private refineries. The agency suspects that the state-owned company would be favoring its own units.

The decision was taken on Monday (5) by the antitrust authority and was signed by the superintendent-general of the body, Alexandre Barreto. “It appears that there could be indications of possible discriminatory practices related to oil sales prices”, says the technical note that supported the decision.

Sought, Petrobras stated that it “acts in full compliance with current legislation and remains available to present the relevant data and clarifications to CADE”.

An agreement signed between Cade and the state-owned company in 2019 determined that Petrobras would sell part of the refineries it operates in Brazil. The first unit was sold last year and, since then, representatives of the purchasing companies began to complain about the oil prices charged by the state-owned company.

With the change in the market structure, Cade started to monitor the sector. Before the sale, there was no competition in refining (since Petrobras was a monopolist). Now, Cade’s fear is that Petrobras will adopt “different commercial conditions in relation to different customers”.

“In addition to evidence of price discrimination practices, it is beneficial to deepen the analysis to verify the existence of other possible practices of discrimination” related to the quality of the input, delays and delivery times, says the technical note.

The preparatory procedure that led to the administrative inquiry was opened in June this year after a decision by Cade’s administrative court, composed of six counselors and a president.

The investigation is not the only action taken by the antitrust authority in relation to Petrobras. Last week, the president of the autarchy, Alexandre Cordeiro, sent a letter to the Federal Supreme Court (STF) stating that he would question Petrobras about its pricing policy.

Depending on the answers, the agency may open a new lawsuit against Petrobras. The state-owned company already has 12 cases open at Cade in which it is investigated. Some of them are already in the administrative court. There is no deadline for completing the procedures.

Before the drop in fuel prices, there was pressure from the political class on Cade so that the agency would make Petrobras lower the amount charged for gasoline and diesel.

Upon assuming the position of general superintendent, however, Barreto ruled out the possibility in an interview with Sheet.

In any case, the price of gasoline subsequently fell and was last week at its lowest since November 2020.

CADE’s General Superintendence functions as a first administrative instance. It is she who investigates crimes against competition, although the final word lies with the administrative court.

In addition to investigating Petrobras’ performance in the fuel refining market, the inquiry should also “evaluate proposals for improving the legal and regulatory framework”. “There is a perception of lack of competition in this market, caused by the current regulation, resulting in a loss of well-being for customers -refineries outside the Petrobras Group- and, finally, for society”, ponders Cade’s technical note.