Petrobras’ diesel and gasoline have the longest lag in 10 years, says entity

The average values ​​​​of diesel and gasoline from Petrobras at the refineries reached this Wednesday (2) a 25% lag compared to import parity, a level not seen for about ten years, according to calculations by Abicom (Brazilian Association of Fuel Importers). ).

The so-called import parity price (PPI) is the cost of the imported product brought into the country.

Petrobras’ current pricing policy seeks to follow the PPI, to avoid losses, considering indicators such as the price of a barrel of oil and the dollar. However, the company has been slow to make adjustments, claiming that this way it avoids passing on international volatilities to the domestic market.

“Petrobras has been practicing prices well below parity in recent months, but now with the conflict in Ukraine, the lags have reached levels [não vistos há muito tempo]”, Abicom president Sergio Araújo told Reuters.

“This level of lag only occurred in the period 2011/2013, when Petrobras accumulated large losses.”

Amid fears of tight supply related to the war in Ukraine, Brent crude rose 7.58% on Wednesday to $112.93 a barrel, the highest since June 2014, while U.S. crude (WTI) rose 6.95% to $110.60, the highest level since May 2011.

In a report to clients, analysts at Goldman Sachs also pointed to lags of more than 20% in Petrobras’ prices this Wednesday.

“In light of the recent increase in oil prices, investors question the feasibility of Petrobras’ current pricing policy — which follows international gasoline and diesel prices, albeit with some delay,” said analysts at the bank Bruno Amorim and Joao Frizo.

The bank pointed out that Brent has already accumulated a high of about 45% in the year, with an advance of 16% in the last week.

“Diesel/gasoline prices at Petrobras refineries have increased 78/75% since January 2021 and currently remain 21/23% below international parity according to our calculations following the recent rise in oil prices,” they said.

Last week, the president of Petrobras, Joaquim Silva e Luna, had told Reuters that the oil company was following the rise in Brent oil prices “minute by minute” before taking any decision on prices. According to Luna, the scenario was still very uncertain and volatile for a definition of possible readjustments, a measure that was always unpopular in society and in the political environment.