Petrobras: diesel price is R$0.14 below par – 05/17/2023 – Market

After the price reduction announced this Tuesday (17), a liter of diesel at Petrobras refineries is R$ 0.14 cheaper than the import parity, a concept that simulates how much it would cost to import the product.

The state-owned company announced that it will no longer follow the indicator in its new pricing policy, which will look more to the local market, considering competition for customers and the opportunity cost of selling products.

The intensity of the reduction announced by the company, of R$ 0.44 per liter, already reflects the new policy, questioned by competitors in the face of the absence of a reference that allows projecting the future behavior of prices in the country.

Abicom (Brazilian Association of Fuel Importers) assesses that the high difference between the domestic price and the import parity closed a window of opportunity for private fuel imports.

In the case of gasoline, although the cut was R$ 0.40 per liter, the price at Petrobras refineries is practically in line with the international market, standing just R$ 0.02 per liter below the import parity.

This concept was included in Petrobras’ commercial strategy during the Michel Temer (MDB) government, with the aim of creating a benchmark for fuel prices in the country.

On the one hand, it tried to shield the state-owned company from political interference, such as the one that generated billionaire losses after the long period of damming prices at the end of the first term of former president Dilma Rousseff (PT).

On the other hand, it also had the objective of promoting the opening of the Brazilian fuel market, encouraging private imports and the arrival of new agents in the sector in order to subsequently reduce Petrobras’ participation in the refining sector.

Known as PPI, the import parity price became the target of criticism with the escalation in the values ​​charged for fuel, which culminated in the truck drivers’ strike that paralyzed the country for two weeks in 2018.

In 2022, with domestic prices reaching record highs after the outbreak of war in Ukraine, it was again in the crosshairs of both the opposition and the government.

The end of the PPI was a campaign promise by President Luiz Inácio Lula da Silva (PT) on the grounds that Brazil is self-sufficient in oil and therefore does not need to charge international prices for fuel.

For the sector, however, the lack of a price reference can generate negative impacts on competition, reducing imports and benefiting the largest distributors, and allowing new political interference in the management of the state-owned company.