New Petrobras policy for fuel completes a month with prices close to the previous model

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Specialists consulted by the g1 estimate that the prices practiced in the sale to the distributors have fallen little and remain similar to the import values. Petrobras’ new policy for fuels turns one month old this Saturday (17). According to the National Petroleum Agency (ANP), the reduction is 1% and 9% in gasoline and diesel prices, respectively, at the pump. This is because, according to experts consulted by g1, the state-owned company has maintained values ​​very close to its previous strategy in sales to distributors. Over the past 6 years, Petrobras has adopted the so-called “import parity policy”. This means that the price of fuel sold to distributors in Brazil was determined by the cost of importing and bringing these products to national ports. The strategy considered the exchange rate of the dollar and a barrel of oil, in addition to expenses with transportation, fees and insurance. This policy favored fuel importers, who were able to compete with Petrobras. The company has the largest share of the national market. If it practices a price close to the import price in its refineries, the importers are able to compete. For Petrobras, this is advantageous, since the cost of imports is greater than the cost of production in the refineries. But the pricing policy changed in May, to meet the government’s wish, which wants to lower fuel prices. At the time, Petrobras explained that its prices for the distributors would be in the range between: the highest value that a buyer can pay before wanting to look for another supplier and the lowest value that Petrobras can practice in the sale while maintaining the profit. Leggio Consultoria, Marcus D’Elia, this price has been around 5% lower than import parity, occasionally varying from 3% to 8%. That is, it is not far from the previous strategy. “In this period, since the announcement until now, these values ​​have been varying around 5%. It’s typically what we call ‘PPI’ [preço de paridade de importação] any less’ . That is, there is not a large variation in relation to the PPI, but a small variation, ”he said. and why this happens? For professor at the Federal University of Rio de Janeiro (UFRJ) Edmar Almeida, the proximity between Petrobras’ price and the import parity is justified by the stability in oil prices and the appreciation of the real in the period. That is, the dollar fell against the real. As the value of the dollar is a factor that makes the PPI more expensive, when the dollar falls, the PPI falls as well. “There are a lot of moving parts. If, on the one hand, the refinery price remained static, on the other hand, the dollar price fell. The dollar, which was at R$5.10, was at R$4.85 and that helped maintain the international parity,” he said. The president of the Brazilian Association of Fuel Importers (Abicom), Sergio Araújo, says that Petrobras’ price “is very little below import parity”, precisely because of the appreciation of the real and the price of a barrel of oil. However, Araújo claims that Petrobras’ policy lacks transparency, which creates insecurity among importers. “The pricing policy is very vague, there are some parameters in the price composition that are not transparent, they are not clear, this creates insecurity and consequently weaknesses for importers’ operations,” he said. According to the UFRJ professor, Petrobras has not demonstrated its intention to deviate from the international parity price, especially for diesel. It is important to remember that the price practiced by Petrobras at the refineries, if it is much lower than the import cost, could make the activity of fuel importers in the country unfeasible. About 25% of the national fuel demand is supplied by imports. Read also: How should Petrobras’ new pricing policy impact the consumer’s pocket? ‘What the PPI did was reference the price to the ceiling’, says Silveira about Petrobras’ price policy New reduction in gasoline On Thursday (15), Petrobras announced a reduction of R$ 0.13 per liter in the price of gasoline sold at refineries to distributors. “With this reduction, announced yesterday [quinta]the Petrobras price dropped and it is below the PPI [preço de paridade de importação] with a slightly more relevant value than in the period since the last readjustment [que passou a valer em 17 de maio]”, said researcher Carla Ferreira from the Institute for Strategic Studies on Petroleum, Natural Gas and Biofuels (INEEP). At Petrobras points of sale for distributors, gasoline is 5% to 8% below par, even with the new cut, according to a survey by Leggio Consultoria. But the professor warns: “The policy has not passed a reality test. What happens if there is a rapid price increase [internacional]? Is Petrobras going to increase or not?”. In D’Elia’s assessment, it still remains to be seen how the company will react to changes in the international parity, including a possible reduction in import prices to levels below Petrobras’ prices. However, the expert claims that the new policy is positive for the country. “You manage to keep prices balanced in relation to the international market. This makes the refining market in Brazil a stable market.” How should Petrobras’ new pricing policy impact the consumer’s pocket? Resumption of federal taxes in July In the week of June 4th to 10th, the price of gasoline rose R$ 0.21 per liter in the national average and diesel, R$ 0.17. This occurred despite Petrobras’ reduction in refineries due to the change in the form of taxation of ICMS, which went from a percentage per liter to a fixed amount, being charged in a single stage of the chain. At the time, Petrobras did not act to compensate for the increase. But, on Thursday (15), the company announced a reduction of R$ 0.13 in the liter of gasoline, or 4%. The price cut comes before another tax hike that is expected to affect fuel prices. In July, the full collection of federal taxes on gasoline and ethanol will resume. For the Ineep researcher, Petrobras’ reduction may be a measure to offset the increase in taxation, which will increase the price of gasoline for consumers at the pump. Federal taxes will increase from R$0.47 per liter to R$0.69 per liter as of July 1st. According to Ferreira, in addition to the reencumbrance, medium and long-term analyzes of market behavior and the dollar exchange rate may have given Petrobras more comfort to reduce the price. “The international price itself continues to be an important reference, but not the only one”, said Ferreira. The researcher points out, however, that the period of one month is too short to understand how Petrobras will behave in relation to the new strategy. Competition with importers and private refineries For D’Elia, from Leggio Consultoria, the difference in the price charged by Petrobras should not make importing fuel unfeasible, but it will also be unlikely to stimulate activity. The expert claims that independent importers, who are not linked to a specific distributor, will act to supply the demand that is not met by the national production of fuels. “It means that you will have less imports, but it remains at the expected volume in the interval between domestic production and expected demand. It’s a difficult number to get right because demand varies over time, depending on whether the economy is heating up or some other specific factor,” explained D’Elia. According to ANP data, until March 2023, Brazil consumes 25.5% of diesel oil, 12.6% of gasoline and 18.5% of imported cooking gas. For the president of Abicom, importing diesel is becoming unfeasible for companies that are not willing to buy products from Russia, embargoed and cheaper. Petrobras is the supplier of 80% of the gasoline purchased by fuel distributors. For diesel, the share is 74.5%. The rest of the market is supplied by imports or by private oil refineries. After Petrobras, the companies with the highest national production are Acelen and Refinaria de Manaus (Ream). The two own the first refineries sold by Petrobras, in Bahia and Amazonas. According to D’Elia, the two companies are better able to compete with Petrobras, even if they practice import parity prices. They are more competitive in areas close to their location due to lower costs for transporting fuel produced in the surroundings. For UFRJ professor Edmar Almeida, Petrobras is not in a position to compete with private refineries in these regions. “But in other areas there is a strong presence of Petrobras competing, so this uncertainty, whether or not it will keep up with the international price, does harm competition,” he said.

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