Higher gasoline prices limit room for cuts at Petrobras – 02/27/2023 – Market

Although the price of gasoline at Brazilian refineries is now more expensive than international quotations, the prospect of an increase abroad may limit Petrobras’ action to offset the return of federal taxes on fuel.

At the opening of the market this Monday (27th), gasoline sold by Brazilian refineries was, on average, 7% above the import parity, a concept that simulates how much it would cost to import the product, calculated by Abicom (Brazilian Association of Petroleum Importers). fuels).

This represents a margin of BRL 0.21 per liter, which could be used by the state-owned company to at least partially minimize the resumption of Cide and PIS / Cofins collection in early March – the old rates added up to BRL 0.69 per liter , but the Lula government has not yet announced how much it will charge with the reinstatement.

Since early February, Petrobras has spent more time selling fuel above par than below, which could justify a cut at this point. The last time Petrobras changed the price of gasoline was at the end of January, with an increase of 7.4%.

But seasonally, the international price of gasoline tends to rise in the second quarter, with the search for stocks to meet the demand generated in the summer in the United States, when car trips across the country intensify.

In its last projection, in early February, the EIA (the US Government’s Energy Information Agency) projected a 2.5% rise in the average price of gasoline at US service stations in the second quarter.

On Monday, contacts for April were trading at an increase of around 10% compared to the value for March. The assessment of both importers and distributors operating in the country is that there is no more room for cuts.

In the week before Carnival, gasoline was sold in the country at an average price of R$ 5.07 per liter — the ANP (National Agency of Petroleum, Gas and Biofuels) has not yet released data for last week.

If federal taxes are passed on in full, the average liter price would rise to R$5.75, a level last seen in July 2021. Ethanol would rise from R$3.80 to R$4.04. The government has not yet announced the new rates, but the trend is for the increase to be gradual, starting with lower values.

Lula’s nominee for the presidency of Petrobras, Jean Paul Prates, took office at the end of January, but he still hasn’t been able to name his team, as the nominees are being evaluated by the internal committees responsible for analyzing the CVs.

He defends the change in the state-owned company’s pricing policy, which would also require changing the board of directors to a group more aligned with the government, which will only occur at a general meeting of shareholders scheduled for April.

“The need to reformulate the PPI is crucial [preço de paridade de importação]as per President Lula’s campaign promise”, demanded this Monday the general coordinator of the FUP (Federação Único dos Petroleum Workers), Deyvid Bacelar, who was part of the government’s transition group for the energy area.

Bacelar recalled that one of the work group’s recommendations was to maintain the tax exemption until the change in the price policy, as defended last week by the president of the PT, Gleisi Hoffmann.

“It makes no sense that Brazil, self-sufficient in oil production, with two thirds of extraction costs in reais, and 85% of fuel produced in the country, adopt the PPI, which uses vectors for price formation that do not match the Brazilian reality”, alleges the trade unionist.