New Petrobras policy will follow international quotations, but without import parity, says Prates – 02/03/2023 – Market

The president of Petrobras, Jean Paul Prates, said this Thursday (2nd), that the new pricing policy will remain linked to international quotations, but without necessarily considering the costs of importing products.

Prates said that the current model, which provides for the monitoring of an import parity price, known as PPI, obliges the company to set the price of its competitors, a strategy adopted by previous administrations, according to him, to benefit importers and open up the market. .

“Why am I obliged to practice the competitor’s price?”, he questioned. “As long as there is market share for Petrobras to capture, it will capture it.”

The forecast is that the company’s new pricing policy will begin to be debated when the board and the board of directors are renewed, which should occur by May. There is still no defined formula, but the import parity will no longer be mandatory.

Prates said that he received guidance from the government to follow all the state-owned company’s governance rules and, therefore, both the change in the price policy and the dividend policy depend on the renewal of the company’s top management.

Both are the target of harsh criticism from the PT. In 2022, the year in which it practiced record fuel prices, Petrobras had the highest profit in the history of Brazilian public companies and announced the distribution of up to R$ 216 billion in dividends.

“Petrobras will charge competitive prices for the national market, for its market, as it sees fit to guarantee its market share”, said the executive, in his first press conference as president of Petrobras.

Asked about the negative impacts of price controls on PT administrations, he said he is not going to “cannibalize, annihilate” the company’s profit margin. “But I can dispute my market with my margin. Interventionist was the previous government, which ordered me to practice the PPI to benefit the importer.”

The determination to follow the internal rules, he says, justified the approval of dividends of R$ 35.8 billion to remunerate the shareholder for the profit of the fourth quarter of 2022. The new management proposed to retain R$ 6.5 billion of this total, which exceeded the volume established by current policy.

The retention proposal will be presented at a shareholders’ meeting at the end of April. The idea is to present the shareholder with an investment plan with these resources. In practice, however, the government has enough votes to approve the proposal without the need to convince the private investor.

Prates reinforced that the company will once again invest in renewable energies, with a focus on offshore wind energy, which may have synergy with oil exploration and production.

He also said that the company should follow the government’s directive to order platforms and ships in the country again, as long as the shipbuilding industry is able to meet orders without charging prices much higher than alternatives abroad.

This program, he said, will require coordinated action with various government agencies, with the definition of incentives for the shipyards to return to operation. In the first PT administrations, orders in the shipbuilding industry were the target of Operation Lava Jato and ended with confessions of payment of bribes and surcharges.

“I think the country is acquiring more and more maturity to deal with this matter”, he commented. “The fear of corruption cannot be an excuse to buy everything from abroad.”