Fuel prices are higher than those applied abroad
The market is always attentive to the prices of fuel sold by Petrobras. This is due to the fact that the values applied by the company directly affect the sales of fuel in the country.
According to the Brazilian Association of Fuel Importers.abicom:), Monday morning gasoline prices were 10% higher than the international market (6). This percentage is equivalent to a reduction of R$0.29 per liter.
Diesel fuel was sold at even higher prices in the country, 18% higher than prices abroad. This means that Petrobras can contribute to an average reduction of R$0.68 per liter of fuel.
It should be noted that other consulting organizations also found that the prices applied by Petrobras were higher than the international market.
Agreed StoneX:Gasoline sold by Petrobras was 0.38 rubles more expensive than abroad. Therefore, the company could reduce the cost by 11.6%. The consultancy also found that diesel fuel is 0.76 rials above international prices, which would create room for a 16.8% reduction in fuel prices.
In turn, the Brazilian Infrastructure and Energy Center (CBIE:) calculated that diesel fuel is 14.14% higher than international prices, while gasoline sold by Petrobras to distributors is 8.86% more expensive than abroad.
All these data show that both petrol and diesel are more expensive in the country compared to the international market. And this fact is very important because Petrobras relies on foreign prices to set fuel price adjustments.
Understand Petrobras’ pricing policy
In summary, Petrobras is looking for International Price Parity (IPP) to make fuel imports feasible. This is because Brazil has other importers and when the company charges below market prices, it makes it unviable to import fuel.
In the last months of 2022, Petrobras was doing just that, selling fuel cheaper than prices abroad to the country’s distributors and refineries. By the way, when there is a delay in prices, it means that the company has lower prices than those used in the market.
This scenario is very bad because distributors stop buying fuel from other importers because Petrobras prices are cheaper. And those importers reduce fuel purchases, because it is no longer profitable for them. The problem is that it can lead to a shortage of gasoline and diesel fuel for the population.
On the other hand, when the opposite happens and Petrobras starts selling fuel at higher prices than the international market, refineries and distributors pass those new prices on to the population. After all, consumers are paying more to fill up their cars at gas stations across the country.
This shows that, one way or another, Petrobras needs to be careful to follow the PPI. Otherwise, any party involved in the process, be it the distributor or the consumer, may be affected by these decisions.
Petrobras reduced gasoline prices in January
Last month, Petrobras raised the price of gasoline in the country by 7.46%. As a result, a liter of fuel began to be sold at 3.31 yuan to distributors. By the way, this is an increase of 23 cents compared to the previous price (3.08 rubles).
Petrobras clarified that its share of the price transferred to the consumer reached 2.42 rials to the dollar with this price increase. This value, notified by the company, refers to the fuel that has a mandatory mixture of 73% A gasoline and 27% anhydrous ethanol for the composition of gasoline sold at stations.
In summary, Petrobras continues to monitor foreign market prices, triggering fuel adjustments when there are delays in the country. However, when the opposite happens and prices are higher in Brazil, the state-owned company also promotes adjustments by lowering fuel prices.
This price policy of Petrobras was adopted in 2016. In short, it is based on the international price of one barrel of oil and the fluctuation of the dollar. Knowing this data, the state-owned company determines the adjustment of fuel prices.
In 2023, both the barrel of oil and the dollar accumulate minor price declines. However, Petrobras decided to raise fuel prices. However, new consultancy research shows that petrol and diesel prices are higher than the international market.
In this scenario, consumers can only hope for new adjustments from Petrobras, this time reducing the cost of fuel.
