The director of Marketing and Logistics at Petrobras, Cláudio Mastella, said this Thursday (24) that the company will wait for the evolution of the international scenario before deciding to transfer the increase in oil prices after the beginning of the Russian attacks on Ukraine.
Experts, however, believe that the conflict in Ukraine will keep prices under pressure, with impacts on Brazilian inflation, which is already suffering from the recent rise in fuel and energy prices.
The international price of Brent oil hit US$ 105 per barrel for the first time since 2014, putting pressure on the state-owned company, which was already practicing prices below the market. The price of natural gas also rose and should impact the electricity bill.
“We need to keep watching a little bit, we don’t have an easy or simple answer”, said Mastella, in a virtual conference with analysts to detail the record profit of R$ 106.6 billion registered by the company in 2021.
Petrobras has already been questioned for the long time without readjustments in a scenario of high international quotations. The latest increases in the prices of gasoline and diesel sold by the company were made on January 12.
On Wednesday (23), even with the appreciation of the real, the gap between domestic and international diesel prices was 5%, according to Abicom (Brazilian Association of Fuel Importers). In the case of gasoline, it reached 9%.
At the conference with Petrobras’ board this Thursday, analysts asked what the limit is to hold transfers.
“Due to several geopolitical tensions, we have observed an increase in prices. In parallel, the dollar is devaluing”, highlighted Mastella. “With these two movements in opposition, we managed to maintain our prices.”
On the impacts of the situation in Ukraine, he said that the market is currently experiencing a “peak volatility” and that the moment is still “extremely uncertain”. Therefore, the company will continue to observe the market before making decisions.
“In this scenario, we will continue to observe [a evolução das cotações] minute by minute”, summarized the president of Petrobras, Joaquim Silva e Luna, in a virtual conference with foreign analysts.
For experts, conflict should put pressure on quotes.
“Oil and gas prices are rising and efforts to tap strategic reserves or reach a nuclear deal with Iran will do little to stop the upward momentum,” says Edward Moya, a financial market analyst at Oanda in New York.
“Even if a nuclear deal with Iran is revived, the short-term outlook still has a huge oil deficit and it doesn’t matter if you switch from Iran to Russian sanctions,” he concludes.
The market expects strong pressure on the price of natural gas, as Europe is heavily dependent on Russia for the supply of this fuel. In 2021, about 30% of the 84 million cubic meters per day consumed, on average, in Brazil were imported on ships, in the liquefied form.
With the recovery of the reservoirs and the consequent shutdown of thermal plants, these imports dropped to around 14 million cubic meters per day. But the European search for alternatives to Russia increases competition for supply contracts.
“LNG export facilities [gás natural liquefeito] of the United States are already operating at close to full capacity and have been for much of the past year,” says Ross Wyeno, lead analyst for the Americas LNG market at S&P Global Platts Analytics.
According to him, European demand may justify the expansion of these facilities, but the results would only begin to be noticed in 2024.
“We do not see a risk in the matter of cargo handling to meet our contractual commitments. What we see is a very significant impact in terms of cost”, said this Thursday the director of Refining and Natural Gas at Petrobras, Rodrigo Costa.
“We can already see LNG returning to US$ 30 [R$ 153] per million BTU [unidade de poder calorífico]which would be equivalent to US$ 300 [R$ 1.530] per barrel”, he added.
At the end of 2021, the rise in gas prices increased the hole in the bill for the payment of thermal plants that were connected to save water in the reservoirs, which led the government to negotiate a new loan to the electricity sector, estimated at up to R$10 .8 billion.
In 2021, following the rise in oil prices and the exchange rate devaluation, Petrobras sold its fuel for an average price of R$ 416.4 per barrel, the highest ever recorded by the company. The transfers took pump prices in the country to historic records as well.
The increase in international quotations and the pass-through to the price of derivatives was the main driver of the record profit recorded by the company in the year. Based on its performance, the company will distribute a total of R$101.4 billion in dividends.
At the conference with analysts this Thursday, Silva e Luna celebrated “excellent operational and financial results” and reinforced the defense that a profitable Petrobras guarantees greater returns for the whole of society.
The company claims, for example, that it returned to shareholders and governments 57% of all its operating cash generation, both in tax payments and in dividend distribution, a total of R$230 billion.
For Silva e Luna, “this is only possible because we imprint rationality both in our strategic plan and in our financial and operational management”.
The rise in fuel prices has become a headache for President Jair Bolsonaro (PL), given the possible effects of escalating inflation on the campaign for his reelection.
The government has already tried to share responsibility with governors, then it started to criticize the state-owned company itself and, finally, it tries to approve in Congress the reduction of taxes on products.
The fuel price policy is also the target of pre-candidates for the Presidency of the Republic, such as the leader of the polls, Luiz Inácio Lula da Silva, who talks about reviewing the current model.
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