Petrobras hikes fuel prices again

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Brazil’s oil and gas major Petrobras announced it will hike gasoline and diesel prices sold at refineries by 5 and 14.2 percent, respectively.

Such moves have a near-immediate impact on prices at the pump, and consumers should quickly feel the pinch of ballooning fuel inflation. In 2022 alone, the average nationwide cost for a liter of gasoline has gone up by 9 percent. For a liter of diesel, the increase is close to 29 percent.

This new hike comes as the Jair Bolsonaro administration moves to overhaul Petrobras’ leadership as its controlling shareholder. On May 23, the Mines and Energy Ministry said the government wanted to remove CEO José Mauro Coelho. The announcement came just 40 days after Mr. Coelho had taken office.

In recent meetings with Petrobras executives, government officials urged the company to freeze prices for the time being. But the company’s officers, on multiple occasions, have committed themselves to the dollar-pegged pricing policy used since 2016.

Petrobras mentioned a “challenging” outlook of the energy sector in a securities filing, highlighting the global economy’s struggles and the war in Ukraine.

This week, the Brazilian Congress passed a law capping fuel taxes at 17 percent (most states have a 25-percent rate). States say the move will cripple their finances — and the intended results will not be achieved.