MercoPress. South Atlantic News Agency

Petrobras shares plummet on fears that fuel price increases will be further delayed

Plenty of oil in Brazil but not enough refineries

Brazilian state-run oil firm Petrobras fell to its lowest level in more than a year on Tuesday, pushing the country's stock market to a near three-month low on concerns the government may delay a new pricing policy that could stem losses in the firm's refining division.

 Brazil's benchmark Bovespa stock index fell for the fourth session in five, losing 1.56% to close at 51,446.91, a level it has not closed below since Aug. 30.

Preferred shares of Petrobras tumbled 6.29%, their biggest daily loss since June 2012, after Finance Minister Guido Mantega said the government must carefully analyze a potential fuel price policy that would automatically raise gasoline prices along with inflation.

The company has been forced to import fuel and sell gasoline at a loss due to prices that are kept below global market rates to help keep inflation in check.

Petrobras is the heaviest-weighted component of the Bovespa.

President Dilma Rousseff is reluctant to allow an increase in fuel prices because of its possible 'social consequences', looking back to the month long protests in June, and the fact that presidential elections are less than a year away.