Petrobras warns that pricing policy may change in document to investors

Petrobras has warned investors that its fuel pricing policy could change in the future, highlighting statements by President Jair Bolsonaro (PL) in this regard. The notice appears in a document deposited this Wednesday (30) with the SEC (Securities and Exchange Commission), the capital market regulatory body in the United States.

“In the future, there may be times when the prices of our products will not be in parity with the international prices of the products. Actions and legislation imposed by the Brazilian government, as our controlling shareholder, may affect these price decisions”, states the state company in text that integrates the annual rendering of accounts of the company.

The document also lists other business risk factors, such as adversities in the oil and gas sector.

The dispute over fuel prices led to the resignation of the company’s president, General Joaquim Silva e Luna, by Bolsonaro on Monday. Gasoline, diesel and gas are among the items with the greatest weight in inflation, a problem that worries the Planalto in an election year.

A Datafolha survey released this week shows that, for most Brazilians (68%), the Bolsonaro government is responsible for the rise in fuel prices.

Luna had been under pressure to revise the rise in prices after the soaring price of a barrel of oil as a result of the war in Ukraine. The general was publicly pressured by Bolsonaro himself and by the president of the Chamber, Arthur Lira (PP-AL).

The military man, however, said internally that the variations were conjunctural and not structural and that the time had not yet come to review the mega-increase promoted by the company.

In almost a year of Silva e Luna’s administration, gasoline prices rose 27% and diesel prices, 47%. The gas cylinder rose 27% and the CNG (vehicle gas), 44%.

In the document sent to the SEC, called form 20-F, Petrobras states that “the Brazilian president has, at times, made statements regarding the need to modify and adjust our pricing policy to domestic conditions”.

“In light of the statements made by the president, a new board or Board of Directors may propose changes to our pricing policies, including deciding that these policies do not seek alignment with international price parity,” the company said in the document.

Petrobras also highlights that decisions taken by the government may negatively affect its business, results and financial conditions.

It is not the first time that the state-owned company has made this type of alert to the SEC. In the form 20-F filed by the company last year, Petrobras had already highlighted that its pricing policy could change in the face of statements made by the Brazilian president, a new CEO — at the time, the state-owned company was also undergoing a change of command, with replacement of Roberto Castello Branco by Luna—, a new board of directors or a new Board of Directors.