By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The state-owned oil giant of Brazil, Petrobras, announced on late on Wednesday (June 14th) a reduction of gasoline and diesel prices at its refineries. Gasoline prices will be reduced by 2.3 percent while diesel prices will decrease by 5.8 percent.

Brazil,Petrobras cuts gasoline and diesel fuel prices at its refineries
Petrobras cuts gasoline and diesel fuel prices at its refineries, photo by Deltafrut/Wikimedia Creative Commons License.

The company also noted that price adjustments, currently made once a month, would occur in shorter periods due to the volatilities observed in the international market.

“The readjustments in approximate periods of thirty days have not been sufficient to reflect the volatilities of international prices of derivatives and exchange between the dates of the readjustments,” said the Petrobras note.

“The GEMP (Market and Price Executive Group) has advanced this discussion and will begin the practice of price adjustments in shorter periods, without changing the current price policy rule, to accommodate the volatilities observed in the international market,” concluded the press release.

In practical terms, Petrobras estimates that at the pumps consumers may pay about R$0.11 less per liter of diesel fuel and an average of R$0.03 less per liter of gasoline.

According to Petrobras officials the decision to reduce fuel prices reflects recent changes in international oil prices, which, after hovering at around US$50 per barrel, registered a successive drop, closing at below US$46 per barrel on Wednesday.

Despite the decrease in prices, company officials say new fuel prices will continue to show a positive margin in relation to international parity and are in line with the objectives of the 2017-2021 business plan.

In June 2016, when Pedro Parente took over as Petrobras CEO he announced he would put the state-owned company’s interest above political interests and had been assured by President Temer that there would be no political interference in his tenure.

Parente said that fuel prices, constantly used as political chip for governing administrations, would be in line with the international market.

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