Haddad says fuel price cut in July has not been decided – 05/18/2023 – Market

The Minister of Finance, Fernando Haddad, said this Thursday (18) that a new cut in fuel prices in July is not certain and that Petrobras will continue to observe international quotations to readjust its prices.

“The president of Petrobras made it clear that he will not disconnect from international prices. Also because Brazil imports derivatives. So, he will take all these factors into account”, he said.

Last Wednesday (17), during a hearing in the Chamber of Deputies, Haddad said that the expected increase in gasoline prices for July with the return of the full rate of federal taxes on fuel should be absorbed by a new price reduction by Petrobras.

“We didn’t download everything we could, just waiting for July 1st”, said the minister in the Chamber.

This Thursday, however, Haddad said that what he meant was that, according to Petrobras’ current policy, there would be room to further reduce the price of fuel, but this was not done to wait for July.

Petrobras today follows the rules of the PPI (Import Parity Price), which serves to approximate prices in the domestic market to international ones, and which basically uses the price of a barrel of oil in the international market and the exchange rate as a reference.

According to the PPI, therefore, there would be no room for further fuel cuts.

According to data from Abicom (Brazilian Association of Fuel Importers), after the latest cuts by Petrobras, gasoline in Brazil is on average R$ 0.13 cheaper in Brazil than abroad, which represents a lag of 4%, while diesel is R$ 0.24 below international prices, or with an 8% lag.