Minister announces change in Petrobras’ fuel pricing policy

Minister of Mines and Energy, Alexandre Silveira, announced an important change in the fuel pricing policy of Petrobras in an interview with the Conexão GloboNews program on Wednesday (5th). According to Silveira, the new guideline will be based on the domestic market, not on the international market. The implementation of the measure will begin after the next general assembly of the company, scheduled for the end of April.

The current policy of Petrobras is based on international movements, which the minister considers a “true absurdity.” He believes that the new measure should reduce the price of diesel by between R$ 0.22 and R$ 0.25 per liter. According to the Minister, the new policy will make Petrobras fulfill its function of damping the impact of international crises on the price of fuels in Brazilian refineries.

“A Petrobras will continue to be respected in its governance, it will continue to be respected in its legal nature. But we will demand from Petrobras, as controllers of Petrobras, that it respects the Brazilian people. That it complies with what is in the State Enterprises Law and the Federal Constitution, its state function, which is to create a cushion of damping in these international crises of fuel prices,” said Silveira.

When he took over the ministry in January, the Minister had already indicated interest in changes in Petrobras’ guidelines, believing that it is necessary to preserve the consumer from the volatility of prices on the international market. In February, Silveira said that the discussion about Petrobras’ pricing policy would be deepened in the federal government, as the agenda was very “sensitive” and needed to be handled with “caution.”

The current pricing policy of Petrobras was adopted in 2016, by the government of former President Michel Temer, and is subject to the international parity criterion, which makes the price of fuels vary according to the price of a barrel of oil on the international market and the fluctuations of the dollar.

Since its adoption, the current guidelines for price definition have been controversial. In Jair Bolsonaro’s government, three Petrobras presidents were ousted from their positions because of the pricing policy. The current management is also critical of the state-run company’s pricing policy. Petrobras President Jean Paul Prates has already stated that the guidelines need to be defined by the government, not by the company. Last month, Prates stated that the company could use other parameters to determine prices, rather than the Import Pricing Parity (PPI).

The new pricing policy of Petrobras is expected to have a positive impact for consumers and increase the competitiveness of the national market. The news of the change also comes after important oil-producing countries announced a reduction in supply, which has already impacted oil prices worldwide.

It is important to note that, despite the positive impact expected for consumers, a change in pricing policy has implications for Petrobras as a company. The current policy is based on international movements, which means Petrobras aligns itself with global trends. A shift towards a focus on the domestic market could potentially limit Petrobras’ ability to compete on an international scale.

However, the Minister’s announcement of the change in policy indicates that the government’s priority is to prioritize Brazilian consumers and their interests. Brazil is a major player in the oil market and has the potential to use its position to benefit consumers.

Furthermore, Brazil has always been a country that has prioritized its national sovereignty in the energy sector. In this sense, the government’s move towards a focus on the domestic market is consistent with the country’s history and interests.

Regardless of the implications, the announcement of the change in policy is an important development in the energy sector in Brazil. It shows that the government is actively taking steps to address the issues that have plagued Petrobras’ pricing policy in recent years, with the ultimate goal of ensuring a more stable and predictable fuel pricing policy for Brazilian consumers.