Gasoline in Brazil is almost R$0.10 above import parity

With the drop in international oil prices and the recovery of the real against the dollar in recent weeks, the price of gasoline in Brazilian refineries is today more expensive than international prices.

The market, however, does not expect the state-owned company to promote cuts at this time. “It’s still early.
Prices are well aligned and volatility is very high”, says the president of Abicom (Brazilian Association of Fuel Importers, Sérgio Araújo.

The entity calculates that, after the closing of the trading session on Wednesday (6), the average price of gasoline in Brazilian refineries was R$ 0.09 per liter above the import parity, a concept used by Petrobras in its pricing policy, which simulates the cost to import the products.

It was the second day in a row with a favorable difference for Brazilian refiners: on Tuesday (5th), the average domestic price of gasoline was R$0.05 above the import parity. In the previous days, it was practically aligned with the international market.

The reversal of the lag reflects the drop in oil prices after the release of strategic stocks in the United States and the appreciation of the real in recent weeks. This Wednesday, Brent oil closed at US$ 101 (R$ 473) per barrel and the dollar, at R$ 4.69.

The improvement in indicators has reduced the import parity price by R$0.46 per liter since the mega-increase promoted by Petrobras a little less than a month ago, says Abicom. In the case of diesel, the parity price fell by R$0.14 in the period, but the domestic price is still R$0.29 below the international price.

In the last two days, however, the dollar rose again in the face of the possibility of an increase in interest rates in the United States, in a sign that market volatility remains high.

Petrobras has repeated that its policy provides for the alignment of international fuel prices, but without passing on specific volatilities to the Brazilian consumer. Prior to March’s mega-increases, the company had gone 57 days without touching gasoline and diesel prices.

The lack of readjustments at a time when the price of oil soared in response to the Russian invasion of Ukraine raised questions from shareholders about the company’s management. Afterwards, the transfer generated a strong reaction in the political world.

The mega-price increases have once and for all soured relations between President Jair Bolsonaro (PL) and the president of the state-owned company, General Joaquim Silva e Luna, starting a troubled process of changing the command of the largest state-owned company in the country.

This Wednesday, the government announced the appointment of former MME (Ministry of Mines and Energy) oil and gas secretary José Mauro Coelho to the company’s presidency and Márcio Weber to preside over the board of directors.

The two were chosen after the withdrawal of consultant Adriano Pires and the president of Flamengo, Rodolfo Landim, first options of the government, whose appointments faced obstacles in the area of ​​governance of Petrobras.

In the opinion of analysts and investors, despite calls from Bolsonaro and allies for change, Coelho and Weber should maintain the company’s pricing strategy and policy.