Petrobras announces new readjustment in 20 days, says Bolsonaro

At a press conference this Monday (1), in Rome, President Jair Bolsonaro (no party) said that Petrobras will announce a new readjustment in fuel prices in 20 days.

“Petrobras announces, this I know unofficially, a new readjustment in 20 days”, said Bolsonaro. “This can not happen. We can’t stand it, because the price of fuel is linked to inflation”, he lamented.

In his speech, Bolsonaro also complained about previous governments, such as Michel Temer, when the policy of pegging the price of fuel to the dollar began.

The president also complained that the PT governments started and did not complete the construction of three refineries in the country. According to the president, if only one of them had been completed, the price of fuel would be lower in the country.

The Premium I and II refinery projects never came out on paper and were buried in 2015, still under Dilma Rousseff’s government. The Comperj refinery in Rio de Janeiro, which already had some structures started, was abandoned by the Bolsonaro government in December 2019.

Petrobras concluded that the refinery would not be economically viable after the Chinese oil company CNPC, which was going to invest in the business, withdrew.

Currently, Petrobras has 13 refineries, and intends to sell 8 of them. At the moment, only two have been auctioned, but contracts have not yet been signed.

In addition, Bolsonaro once again said that ICMS is the villain in fuel prices, and again defended the privatization of Petrobras – something that, according to him, is not for the short term.

Dividends

The president also said that he is studying using Petrobras dividends to reduce diesel prices.

“So what do I want from Petrobrass: regarding the income that the Petrobrass gives to the federal government, I am not interested in these resources. I have been talking to Paulo Guedes. We want this to be directly reversed in lower end-of-line diesel prices.”

“The priority is the price of fuel. I saw very quickly, I don’t want to talk now, the profit of Petrobrass. A Petrobrass is partly state-owned and monopolistic. This should not be the policy”, he said. “This week will be a heavy game with the Petrobrass. I nominate the president, go through the council, and everything bad that happens there falls into my lap. Which is good, nothing falls into my lap.”

Wanted, the Petrobrass did not respond to a request for comment on Bolsonaro’s statements.

Later, the company issued a notice to the market stating that it “does not anticipate readjustment decisions” and “that there is no decision taken by its Executive Market and Prices Group (GEMP) that has not yet been announced to the market.”

When contacted, the Brazilian Securities and Exchange Commission (CVM) informed the CNN, in a note, that “follows and analyzes information and movements within the Brazilian capital market, taking appropriate measures, whenever necessary”. “The Autarchy does not comment on specific cases”, he added.

Price lag

The last readjustment announced by the state-owned company was last week, less than twenty days after the previous high. At the time, the average selling price of gasoline A to distributors was adjusted by 7% and diesel by 9.15%.

Even with the latest increases, it is worth mentioning that there is still a lag in prices in Brazil in relation to the foreign market.

Until the beginning of the month, this gap reached 21% in the case of gasoline and 19% in the case of diesel, according to the Brazilian Center for Infrastructure.

This signals that, in addition to these readjustments, the market may still have new highs. In addition, there is a perspective that Oil will continue to appreciate, as the largest producers of the commodity have given signs that they will not increase the supply in the global market.