Understand why gasoline, diesel and cooking gas have different readjustments

Pressured by the escalation of international oil prices, Petrobras announced this Thursday (10) readjustments in the prices of gasoline, diesel and cooking gas. The increases, however, were quite different: 18.8%, 24.9% and 16.1% respectively.

Petrobras Refining Director during the administration that implemented the international price parity policy, Jorge Celestino explains that, in addition to the production cost, fuel prices reflect market conditions for each product, which vary during the year.

Petrobras’ pricing policy follows the quotations for each oil product in the region considered the best supply alternative for the Brazilian market, generally the Gulf of Mexico, which concentrates a large part of the refining capacity of the United States.

Thus, the evaluation of the price of gasoline, for example, considers the price of gasoline in the Gulf of Mexico, the exchange rate and import costs of the product, generating a parameter called import parity.

Although these quotes follow international oil prices, there are other factors influencing its sale value throughout the year, such as the global scenario of supply and demand and seasonal issues.

In the Northern Hemisphere winter, for example, diesel and cooking gas tend to be more expensive due to the high demand for heating. In the summer, the price of gasoline is pressured by high demand in the car travel season in the United States, the world’s largest consumer.

The last adjustment by Petrobras before this Thursday’s announcement had been made on January 12, at a time when diesel prices were still under pressure from high winter demand in the Northern Hemisphere.

In the period without readjustments, prices continued to be pressured abroad, without Petrobras following the trend.

Thus, the lag was greater than for other products: according to Abicom (Brazilian Association of Fuel Importers), on Wednesday (9), the average price of a liter of diesel in Petrobras refineries was R$ 2.54 below the quotations international.

In gasoline, the difference was smaller, R$ 1.41 per liter. With increases of R$ 0.61 per liter for diesel and R$ 0.50 per liter for gasoline, Petrobras reduced part of the gap, but did not eliminate the difference. In general, the state-owned company works with prices just below the international market.

After the announcement of readjustments and benefiting from the drop in international prices and the appreciation of the real against the dollar, the lag fell this Friday to R$ 0.17 for gasoline and R$ 0.19 for diesel, according to Abicom.

Celestino points out that the price of diesel is now also pressured by a tightening of the supply and demand scenario, which in recent weeks has also been affected by the war in Ukraine.

In Europe, unlike the United States and Brazil, the passenger vehicle fleet is mostly powered by diesel and, to a greater or lesser extent, Russia supplies the product to almost all countries on the continent.

In 2019, for example, a third of British diesel imports and a quarter of German imports came from that country, according to Bloomberg. With sanctions on Russian production or greater difficulty in accessing products, these countries have to look for alternatives, inflating the market.

In a normal condition, gasoline would start to appreciate more intensely from April, with the spring holiday in the United States, with greater pressure in June, with the formation of inventories for the summer holidays.

Diesel, in turn, would be yielding from the highest levels at which it is usually traded in the period of greatest demand, with the end of winter approaching.

Analysts, however, see uncertainty about price movements, which will depend on factors such as the duration of the conflict in Eastern Europe and the ability of other producers to replace volumes that Russia may fail to supply, with sanctions or retaliation.

The country is now the third largest oil producer in the world, behind the United States and Saudi Arabia. It also ranks third in refining capacity, behind the United States and China.