Fuel price controls have a harmful effect, says Petrobras director

The director of Marketing and Logistics at Petrobras, Claudio Mastella, returned to defend this Wednesday (30) the fuel price policy of the state-owned company, which is under the sights of the new government elected in October.

In an event promoted by the FGV in Rio de Janeiro, Mastella stated that the “overcontrol” of prices has harmful effects, such as stimulating the consumption of certain products and discouraging investments.

“Nobody likes to pay a high price, but it is a consequence of operating in a market that wants to bring in more actors”, stated the executive.

During the year, Petrobras was the target of complaints from President Jair Bolsonaro (PL), whose popularity was strongly affected by the effects of the price hike in the first half.

Bolsonaro changed two presidents of the state-owned company and also criticized the company’s shareholders, who benefited from record dividends in 2022.

Pricing policy is also the target of the new government, which promises to ‘Brazilize’ prices, currently defined according to international oil and exchange rates.

Mastella defended that the opening of the fuel market was a decision made by the country and that, for it to work, it depends on the practice of market prices.

“To come to the Brazilian market, the new actors have to feel at ease and confident”, he stated.

The transition team for the energy area of ​​the Lula government has already met once with the management of Petrobras and, among the topics on the agenda, was the fuel price policy.

However, there are still no definitions on what the new policy will look like — one of the ideas is to consider internal production costs when setting prices.

During the election campaign, when oil prices began to fall on the international market, Petrobras promoted a series of cuts in the prices of its products.

After the first round, however, oil rose again but the company did not make adjustments, preferring to operate for months with a lag in relation to international quotations.

The situation has reversed in recent days, in the face of market fears regarding a further advance of the pandemic, mainly in China.

According to Abicom (Brazilian Association of Fuel Importers), at the opening of the market this Wednesday, the average price of gasoline in Brazilian refineries was 6%, or R$ 0.20 per liter, above the import parity.

In the case of diesel, the domestic price is practically in line with international quotations. Mastella did not give an interview at the end of the event to comment on the delay for adjustments.

At the event, representatives of the oil sector defended regulatory stability for the maintenance of investments, although without specifically mentioning the change of government.

In addition to the change in pricing policy, the Lula government’s program provides for the resumption of investments in refining in Brazil and definitively cancels projects to privatize the state-owned company.