MercoPress. South Atlantic News Agency
Lack of refining capacity and capped fuel prices hit Petrobras profits
To combat inflation fuel prices at the pump have been frozen Brazil’s state-controlled oil producer Petrobras said third-quarter profit slid 40%, missing analysts’ estimates, on higher fuel imports and refining losses. Net income dropped to 3.39 billion Reais (1.55bn dollars) from 5.66 billion Reais a year earlier, the company said on Friday in a regulatory statement.
Fuel imports are curbing profit as imported gasoline and diesel prices exceeded those in Brazil even after four price increases since June 2012. Imported gasoline cost 20% more than domestic fuel in the quarter because the government, which control’s Petrobras’s board, prohibits fuel sales at market prices to control inflation, Itau Unibanco Holding SA said in a note to clients.
The company’s refining unit posted an operating loss of 8.59 billion Reais in the quarter. Fuel imports climbed to 493,000 barrels a day in the period, an increase of 89% from the previous quarter, Petrobras said in the report.
Petrobras has increased prices for gasoline 15% and diesel 22% since June 2012 to reduce the discount with international prices. The gap narrowed to about 10 percent in the fourth quarter after Brazil's currency rebounded and international crude prices fell, making imported gasoline cheaper.
The Real has strongly appreciated since August 22 when the central bank announced a 60 billion dollars program of currency swaps and credit line auctions. The real reached 2.1523 per dollar on October 17, the highest level since June 14.
Petrobras is investing 237 billion dollars over five years to build refineries, develop deepwater fields and ramp up output at Lula, the second-largest discovery in Brazil’s history after Libra. Petrobras took a 40% stake in the Libra field in a government auction on Oct. 21.
Petrobras expects domestic crude production to double to 4.2 million barrels a day in 2020 as it adds more than 30 production units to fields in deep waters of the Atlantic. It plans to increase refinery output 50% during the period to allow it to phase out fuel imports.
Top Comments
Disclaimer & comment rules-
-
-
Read all commentsThe text ought to read:
Oct 28th, 2013 - 11:24 am 0“Brazil’s state-STRANGLED oil producer Petrobras said third-quarter profit slid 40%”
This is the trouble with all socialist and commie governments in SA.
They “think” (because they clearly do not think) that capping fuel prices helps the economy by attempting to “control” the market. It does not, only Mr. Market controls the market, not a bunch of dead-heads.
So, who pays for the capping? EVERYBODY of course but it starts with Petrobras and eventually the numbnuts in charge will have to agree to a price rise, but the damage is done then.
I wonder why there are insufficient refineries (of the correct type)? Could it be lack of money to build them, of course it is, the money is allocated to “save” the electorate paying the real price of fuel.
Brazil: the way back to the past.
This is an oil company? An oil company that can't refine what it digs up? This from a country that wants to be seen as a “world leader”? A world leader in stupidity? Refinery lost US$4 billion, did it? Aren't refineries supposed to MAKE money? Hang on. Let's think. There it is. http://en.mercopress.com/2013/10/28/rousseff-and-mantega-dispute-imf-report-on-brazil-as-incoherent
Oct 28th, 2013 - 11:37 am 0It's all about “methodology”. Anybody think Brazilians have no more clue than argies?
The corrupt government of Brazil in the last ten years passed an image of great development thru lying. The truth always comes up and now the whole world sees what we Brazilians feel at home: an underdevelopment process. The only development in this contry were the provate bank accounts of those in charge.
Oct 28th, 2013 - 12:42 pm 0Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!