Insider

Petrobras CEO deflects blame for fuel inflation

petrobras ceo
Petrobras CEO Joaquim Silva e Luna during a Senate hearing. Photo: Edilson Rodrigues/SF/CC-BY 4.0

Speaking before a Senate committee, Petrobras CEO Joaquim Silva e Luna reiterated that the company must not be scapegoated for the steep rise in fuel prices, which have risen 45 percent in 2021. Mr. Silva e Luna denied that Petrobras still holds an oil monopoly in Brazil, adding that, in his opinion, consumers have enough options to choose from when filling up their tanks.

But while Petrobras has plenty of competition when it comes to gas stations, the oil giant operates 13 of the country’s 17 refineries — and accounts for 98.6 percent of oil refining in Brazil. As such, Petrobras’s pricing policies have a huge impact on Brazil’s entire fuel market.

Since 2016, Petrobras has pegged its prices to international rates — and with Brent prices rising fast and the Brazilian currency losing ground against the U.S. Dollar, a tank of gas has become much more expensive in all Brazilian cities.

Despite producing oil, Brazil imports refined oil because of the operational limitations of domestic refineries, such as their inability to refine heavy oil. With the dollar being more expensive, the country pays more for imported products.

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