Good morning! Today, we talk about a pricing pivot from Petrobras. The details of the new fiscal framework. And Jair Bolsonaro’s latest police questioning.
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Petrobras pulls the trigger on pricing policy change
Petrobras, Brazil’s state-controlled oil giant, informed in a securities filing this morning that it is officially changing its pricing policy, which for the better part of the last decade has consisted of a peg to international oil rates.
Why it matters. Petrobras still controls roughly 84 percent of the country’s refining capacity, according to data from the National Oil Agency. As such, every pricing decision from the company becomes crucial to Brazil’s domestic fuel market.
The old policy. Since mid-2016, Petrobras’s pricing policy has sought to reflect fluctuations in oil prices on the international market. Initially, price updates were monthly, but in July 2017 they started to occur on an almost daily basis. Fuel prices rose 16 percent in May 2018 alone, sparking a truckers’ strike that proved devastating for the economy.
- During the Dilma Rousseff administration (2011-2016),...