Gasoline price lag hits highest since early July

With the rise in oil prices in recent days, the lag in the domestic price of gasoline in relation to international quotations reached the highest value since the beginning of July, before the series of cuts in refineries promoted by Petrobras.

Experts expect oil prices to remain at high levels, which puts pressure on Petrobras’ management amid the campaign for reelection of President Jair Bolsonaro (PL), who does not want increases before the second round vote.

According to Abicom (Brazilian Association of Fuel Importers), the average price of gasoline in Brazilian refineries was R$0.31 per liter below import parity — a benchmark in relation to international prices — at the opening of the trading session this Thursday. (6).

It is the highest value since the R$ 0.40 registered on the 4th of July. Calculated by Abicom at R$ 0.43 per liter, the lag in the price of diesel is the largest since the R$ 0.52 per liter verified on June 28.

In that period, prices registered high lags for consecutive days, in a sign that Petrobras had been holding off readjustments. Soon after, oil began to fall on the international market and Petrobras carried out a series of price cuts at its refineries.

The cuts intensified a downward movement in gas stations, which began after the reduction of federal and state taxes on fuel and used as one of the trump cards in Bolsonaro’s reelection campaign.

Elected to the command of Petrobras with the mission of “giving new dynamics” to fuel prices, Caio Paes de Andrade began to announce price reductions almost weekly to generate positive facts for the campaign.

Now, with oil on the rise, the company is under pressure to at least hold off readjustments until the vote. To reduce resistance, Paes de Andrade tries to replace the company’s CFO, Rodrigo Araújo, with a name more aligned with the government.

The mission is hampered by the production cut by OPEC (Organization of Petroleum Exporting Countries), announced this Wednesday (7th). For UBS bank, the measure should keep oil high for longer.

In a report, analysts at the bank say that the market remains pressured by increased demand to replace Russian gas and the end of the use of strategic stocks in Europe and the beginning of sanctions against Russian imports in December.

Thus, say the bank’s analysts, the expectation is that the price of Brent, an international benchmark traded in London, is above US$ 100 per barrel in the coming quarters – around 12:30 pm this Thursday, it was traded above US$ 94. .

“We have lags and high bias in the international market”, agrees the president of Abicom, Sergio Araújo, who sees the need for price correction.

Petrobras has said that its pricing policy follows international quotations but without passing on specific volatilities to consumers. It also states that there are no established deadlines for price adjustments.