Petrobras insists it is completely free of political interference and increases diesel price 10 cents

Thursday, April 18th 2019 - 09:41 UTC

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Comments come as executives scramble to contain the fallout from the company’s cancellation on Friday of a diesel price hike at the behest of President Bolsonaro

CEO Roberto Castello Branco announced a diesel price hike of 10 cents per liter and said Petrobras has complete control over its pricing strategy

“I cannot and I will not interfere in Petrobras,” Bolsonaro said in a written statement, read aloud by presidential spokesman Otavio Rego Barros

Brazilian state-run oil firm Petrobras hiked diesel prices on Wednesday, and executives said the firm could expand its already aggressive divestment plan while arguing the company was completely free of political interference.

In an impromptu news conference at the Rio de Janeiro headquarters of Petrobras, CEO Roberto Castello Branco announced a diesel price hike of 10 cents per liter and said Petrobras has complete control over its pricing strategy.

Speaking only minutes before at an event in Sao Paulo, Chief Financial Officer Rafael Grisolia said Petrobras was looking at selling off assets such as deepwater pipelines and Petrobras Distribuidora SA, which includes a gas station chain stretching across the country.

The comments come as executives scramble to contain the fallout from the company’s cancellation on Friday of a diesel price hike at the behest of Brazilian President Jair Bolsonaro, stirring fears of political interference and tanking Petrobras shares.

While Bolsonaro´s government has promised a hands-off approach to Petrobras, investors are wary of a return to policies enacted under past administrations, in which the company was forced to sell fuel at a discount to international rates.

On Tuesday, Bolsonaro´s spokesman and Economy Minister Paulo Guedes sought to characterize the canceled price hike as a one-time error that would not be repeated.

After a meeting of high-ranking officials in Brasilia on Tuesday, the government sought to portray the Friday incident as a one-time event and said Petrobras can choose when and how to adjust fuel prices, which had not been the practice under previous governments.

“I cannot and I will not interfere in Petrobras,” Bolsonaro said in a written statement, read aloud by presidential spokesman Otavio Rego Barros.

According to an information posted on Petrobras’ website, the company increased the price of diesel at refineries by 4.7% after canceling a 5.7% increase on Friday.

Castello Branco said Petrobras “rigorously” keeps its prices in line with international rates and has no plans to change its policy of adjusting fuel prices every 15 days.