Petrobras announces major fuel price hike

After 57 days without altering fuel prices and 152 days holding the cost of cooking gas steady, Brazil’s oil and gas major Petrobras announced a 24.9-percent hike in the price of diesel, 18.7 percent for gasoline, and 16 percent for liquefied petroleum gas (LPG). 

Starting this Friday, the average selling price of Petrobras’ gasoline to distributors will rise from BRL 3.25 (USD 0.64) to BRL 3.86 per liter. For diesel, it will go from BRL 3.61 to BRL 4.51, and LPG will see the average sale price hit BRL 4.48 per kilo. 

In a statement, the government-controlled company justified that the fuel price decision went “in the same direction as other fuel suppliers in Brazil that have already promoted adjustments to their sales prices” and highlighted that, despite soaring international prices of oil and its derivatives in recent weeks as a result of the war in Ukraine, the company decided not to pass on the market volatility to consumers immediately.

Petrobras also claims that the price hike aims to provide “a condition of economic balance so that importing agents take immediate action, and succeed in importing products in order to supplement the supply of fuels to Brazil.”

The announcement generated great dissatisfaction among members of Congress. “Petrobras’s readjustment announcement requires the Senate to analyze [a package of fuel price bills] later today,” highlighted Rodrigo Pacheco, the Senate president.

This package consists of two bills that aim to contain the price of gas at the pumps. The first changes how ICMS state goods and services tax is calculated, while the other creates a price stabilization fund.   

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