Petrobras Cuts Gasoline and Diesel Refinery Prices by 12 and 7.5 Percent

RIO DE JANEIRO, BRAZIL – Petrobras (PETR3; PETR4) reported that as of Thursday, March 19th, it will reduce the price of gasoline at its refineries by 12 percent, after announcing last week a 9.5 percent drop in fuel. Diesel prices will drop by 7.5 percent, versus the 6.5 percent reduction last week.

Petrobras’ fuel prices are in line with the company’s policy of passing on parity with the international price to the market.

Since last weekend, oil quickly lost value, aggravated on Tuesday by President Donald Trump’s speech of likely additional measures to contain the coronavirus, such as the ban on flights from Mexico and Canada, after having already closed other borders.

The news further impacts the flow of travel around the world, which is now severely restricted because of the pandemic. Gasoline, along with diesel and QAV (aviation kerosene) account for 60 percent of global oil consumption.

Petrobras also reported that it will reduce the price of marine diesel by 7.7 percent and of thermal diesel by 7.6 percent for S500 diesel, and by 7.8 percent for units that use S10.

According to analyst Thadeu Siva, from INTL FCStone, the price of gasoline dropped R$0.1820 and automotive diesel R$0.1330 in refineries.

“We are estimating the exact parity value now, but the import window is still open,” Silva said. “The reduction is in line with the strategy of mitigating international market fluctuations, gradually passing on the drop, preserving the margin and preventing further readjustments in the event of a rebound,” he explained.

Early in the week, the analyst of Ativa Investments, Ilan Arbetman, had already anticipated that when the oil would fell beneath the US$30 a barrel mark, as occurred on Tuesday, the state-owned company would have to announce a new drop in fuel prices, which would be consistent with its price policy based on international parity.

Source: InfoMoney