Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Brazil's Petrobras to postpone fuel price hike until after tax cut vote -sources

Published 06/14/2022, 05:21 PM
Updated 06/14/2022, 07:32 PM
© Reuters. FILE PHOTO: A logo of Brazil's state-run Petrobras oil company is seen at its headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes/File Photo

By Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) - Brazilian state-run oil company Petrobras will avoid raising fuel prices until after Congress finishes debating further tax cuts, two sources close to the matter told Reuters on Tuesday.

The firm's management told the government on Monday that Brazil's diesel and gasoline prices are lagging behind international markets.

Diesel prices, which the company increased in May, were 15% below international markets on Monday, while gasoline prices were more than 20% lower than the import parity price.

The final decision depends on factors like oil prices and the exchange rate, "but the idea is to hold," said one of the sources on condition of anonymity.

On Monday, Brazil's Senate approved a bill that caps the ICMS state tax on fuels and other items, a measure aimed at reducing prices to consumers. The bill still needs to be voted on by the country's Lower House.

The logic is that if the final vote is successful, it would be "less traumatic" to carry out a price hike, due to the lower tax burden, said a source.

© Reuters. FILE PHOTO: A logo of Brazil's state-run Petrobras oil company is seen at its headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes/File Photo

Petrobras said in a statement it maintains its commitment to competitive market prices, while wanting to avoid immediate price hikes caused by volatility in the international oil markets.

The Mines and Energy Ministry did not respond to a request for comment.

Latest comments

Good decision, Brazil needs more political stability mainly from STF that’s it’s all the time blocking the development to right way.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.