Amid an inflationary spiral largely caused by rising fuel prices, Petrobras announced an increase in the cost of diesel for distributors which will take effect tomorrow. With the increase, which comes after 85 days of stability, the average price of diesel will rise 8.9 percent from BRL 2.81 (USD 0.52) to BRL 3.06 per liter. Diesel prices are already up 51 percent so far this year.
The announcement came one day after Petrobras CEO Joaquim Silva e Luna hastily called a press conference to explain the composition of fuel prices. On Monday, Mr. Silva e Luna said the state-owned company is responsible for less than a third of the price of gas and reaffirmed Petrobras’ commitment to its pricing policy, being pegged to international rates.
Earlier that day, President Jair Bolsonaro had blamed Petrobras’ pricing policy for driving fuel prices up and putting pressure on inflation.
According to a statement from Petrobras this Tuesday, the diesel hike is important for “the market to continue to be supplied on an economic basis and without the risk of shortages by the different actors responsible for supplying Brazil’s regions: distributors, importers, and other producers, in addition to Petrobras.” The company attributed the rise in diesel prices to the weakening of the Brazilian Real and increased oil prices. Last Thursday, a barrel of Brent oil reached the USD 80 mark, its highest value in three years.