Petrobras announces first gas price reduction since December

Petrobras, Brazil’s state-controlled oil and gas giant, on Tuesday announced that it would reduce gasoline prices at its refineries by 4.9 percent. The new rates are effective from tomorrow.

This is the first drop in gas prices since December 2021. It comes less than a month after Caio Paes de Andrade, a former senior official at the Economy Ministry, took office as the chief executive officer at Petrobras.

His three immediate predecessors lost their job after prices at refineries went up (given Petrobras’s massive market share in oil refining, its rates significantly impact prices at the pump).

Mr. Bolsonaro has repeatedly urged Petrobras to fulfill its “social role,” holding gas prices down even if this hurts the company’s bottom line. Since 2016, the company has pegged its rates to international prices but progressively spaced out readjustments to reduce price volatility.

After rising by almost 60 percent between January and June, the Brent value has now gone down by 13 percent.

Moments before Petrobras announced the price change, Mr. Bolsonaro told supporters in Brasília that he was confident that, with Mr. Andrade at the helm, the oil company would finally “find a way” to give “good news” to the Brazilian people. 

According to Abicom, an association of fuel importers, the average gasoline price in Brazilian refineries had for a week been 8 percent more expensive in the domestic market than in the international one.

• #oilAndGas
• #petrobras