Brazil lowers fuel prices: diesel down 10.4% and gasoline, 3.1% at the refinery

Thursday, November 10th 2016 - 11:35 UTC

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The aim is to enable Petrobras to implement a competitive pricing policy that reflects movements in the international oil market in shorter periods.

In line with the pricing policy announced by Petrobras on October 14, 2016, the company’s markets and pricing executive committee has decided to reduce the prices of diesel and gasoline sold at its refineries by 10.4% and 3.1%, respectively.The combination of a 12.1% fall in the international prices of oil and oil products between October 14 and now, and the reduction in the company’s domestic market share has impacted the usage level of Petrobras’ assets, especially its refineries, its inventory levels and also its flows of imports and exports

. These circumstances convinced Petrobras to further change its fuel prices, according to the company.

The methodology defined by Petrobras provides for adjustments to the prices charged at its refineries at least once a month, following analysis by the committee, made up of the company’s CEO, refining and natural gas director, and finance and investor relations director.

The aim is to enable Petrobras to implement a competitive pricing policy that reflects movements in the international oil market in shorter periods.

As Brazilian law guarantees pricing freedom in the fuel market, the changes made by Petrobras at its refineries may or may not be reflected in the end prices paid by consumers. This will depend on decisions made by other parts of the oil chain, especially distributors and gas stations. If the adjustments made on Wednesday are fully passed on, diesel prices may fall 6.6% or around R$0.20 per liter, while gasoline prices may decline 1.3% or R$0.05 per liter.

Categories: Economy, Energy & Oil, Brazil.

Tags: Brazil, Petrobras, Petrobras fuel price.

Top Comments

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Bisley
Government should not be manipulating the price of fuel, or anything else -- nor should it own, or control oil companies, or any other companies. Prices need to be set by supply and demand in a free market to ensure that they have some relation to the costs of production, and match production to demand within a profitable range. Government interference sends signals to both consumers and producers that prevent the system from moving toward a proper balance, and creates chaos.
Nov 10th, 2016 - 04:44 pm +1
Jack Bauer
That is exactly why PB, under the Temer government, has adopted a fuel policy prevalent in most civilized countries. No longer will the prices be subsidized by PB in order to boost the Government's popularity (as done by Lula and Dilma between 2010 and 2014), nor will they be set artificially. Prices will be adjusted whenever necessary, based on the international oil prices.
The reason that PB is currently majority-owned by the Federal government, is only because Lula, in 2007, decided to take control of it again by an accounting gimmick whereby they acquired sufficient controlling shares without forking out one penny - a disgusting trade-off, only possible under a corrupt government and a PT dominated Congress at the time. But Temer has already mentioned that the possibility of privatization is not off the table...
Nov 10th, 2016 - 06:11 pm +1
:o))
For a huge country like Brazil where most of the goods are mainly transported by the roads/highways; the lowering of the fuel-prices - NATURALLY [supply-demand] or ARTIFICIALLY [political-reasons] - can help lower the inflation and boost the economy; provided the benefits of the lowering of prices trickle down to the masses. Secondly; if the state-run industries are unable to make profits; they better be privatized.
Nov 13th, 2016 - 01:43 pm 0

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