Petrobras announces first diesel price reduction in more than a year

diesel price reduction petrobras
Photo: Isaac Fontana/Shutterstock

Brazil’s oil and gas giant Petrobras announced a 3.6-percent reduction in the prices of diesel sold at refineries and distributors starting on Friday. Rates for other fuels remained unchanged. The last time diesel prices went down in the country was in May last year.

In a statement, the company said the new price “follows the progression of reference prices, which have stabilized at a lower level for diesel” and emphasized that the reduction is consistent with the company’s pricing policy, which is pegged to the international market. 

In July, Petrobras made two price cuts for gasoline but kept diesel rates stable. Last week, Petrobras’ sales and logistics officer Cláudio Mastella even stated that fuel prices were unlikely to fall until the end of the year, given supply problems and the proximity to winter in the Northern Hemisphere. Diesel prices have gone up more than 50 percent in the past year. 

This reduction is the first to happen since the Brazilian government sent a proposal to the state-controlled company to transfer responsibility over prices from C-level executives to the board of directors — where the government holds a majority of seats. 

The move was the government’s first direct attempt to interfere in Petrobras’ pricing policy after repeatedly firing the company’s CEO. Given the oil and gas giant has a significant market share in refining fuels, any move concerning prices has a massive impact on Brazilian’s pockets and, consequently, on the popularity of Mr. Bolsonaro, who faces an uphill battle for re-election. 

The diesel price drop also comes at a good time for the president, who is still trying to find ways to cater to the demands of truck drivers, an important part of his support base. Among the most recent measures announced by the government to this end is a voucher for truckers to buy fuel.