Petrobras should raise gasoline and diesel prices, say importers

With the recent rise in oil on the international market, gasoline and diesel prices have lagged in Brazil, and Petrobras should announce increases, says Sergio Araújo, president of Abicom (Brazilian Association of Fuel Importers).

“In our view, Petrobras should announce readjustments in gasoline and diesel so that it is consistent with the pricing policy implemented”, he says.

“If you look at, a few weeks ago, when there was a drop in the market, Petrobras adjusted prices down almost weekly”, he adds.

Oil prices and the exchange rate are pillars of the state-owned company’s policy. This month, the commodity picked up high with the announcement of the production cut by OPEC+, which brings together the largest exporters in the world. The scenario of reduced supply pushed prices up.

Petrobras, however, has avoided readjustments in refineries on the eve of the second round of the presidential elections. as showed the Sheet, company sources report pressure from the government to avoid negative news until the end of the dispute. The fear is of damage to the campaign of President Jair Bolsonaro (PL).

This Wednesday (19), the average value of gasoline in Brazilian refineries was 5% below import parity, according to Abicom. The lag in relation to international prices corresponded to R$ 0.18 per liter.

That difference was even bigger last week. She came to touch R$0.43 on Friday (14th). The concept simulates how much it would cost to import the product from the closest suppliers.

According to Abicom, the price of gasoline in Brazil has been below that practiced abroad since October 4th. That is, it has been more than two weeks in this condition.

The lag is even greater in the case of diesel. It was 12% this Wednesday, or R$ 0.70 below parity, according to the entity.

The difference reached R$ 0.97 on Friday. Diesel also shows a lag since the first week of October.

When consulted on the matter, Petrobras said that, due to competition issues, it cannot anticipate decisions on maintenance or price adjustments.

“The monitoring of quotes is done daily and the decision to update prices is entirely technical,” said the company in a note.

Petrobras played a leading role on the eve of the first round of elections. At the time, the state-owned company confirmed almost weekly price cuts amid the lull in oil prices. The news was celebrated by Bolsonaro’s campaign.

Now, with the appreciation of oil, the falls have stopped. Meanwhile, the largest private Brazilian refiner, the Mataripe Refinery, in Bahia, on Saturday (15) increased its gasoline and diesel sales prices.

It was the second increase after the OPEC production cut. The refinery is controlled by the Arab Mubadala fund.

After 15 casualties, gasoline rose again at Brazilian stations last week, according to a survey by the ANP (National Agency for Petroleum, Gas and Biofuels). The fuel was sold at R$ 4.86 per litre.

For Sergio Araújo, from Abicom, the bias is for oil prices to rise, which tends to keep putting pressure on Petrobras. “The main impact is the OPEC announcement, as supply decreases and demand remains.”