Petrobras: after a “fright” with Lira, the CEO’s speeches showed clarity about the state’s direction, analysts point out

Joaquim Silva e Luna and Arthur Lira (Photo Cleia Viana/Chamber of Representatives)

SAO PAULO – Petrobras’ action (PETR3;PETR4) closed the session of last Tuesday (14) in a fall, still amidst speeches last Monday night (13) by the president of the Chamber, Arthur Lira (PP -AL).

Lira criticized the company’s management in a message published on Twitter, after Casa confirms that the president of the company, Joaquim Silva e Luna, would participate in a hearing at the Casa on Tuesday (14) to talk about fuel prices.

“Everything is expensive: gasoline, diesel, cooking gas. What does Petrobras have to do with this? (…) The plenary becomes the General Committee to question the weight of the company’s prices in the pockets of all of us. Petrobras must be remembered: Brazilians are its shareholders”, wrote the president of the Chamber, which was understood by investors as a sign of disposition for possible interventions.

Lira’s position followed attacks made on Petrobras’ pricing policy in the face of high inflation. Following statements by the president of the Chamber, Petrobras’ ADR in New York plunged more than 2% in Monday’s extended session, closing down 1.16%. On Wednesday, the day is one of gains for the company’s shares, also reflecting the rise in the price of the main oil contracts.

Silva and Luna’s debate lasted more than four hours last Tuesday, with the company’s director giving some signals about the company’s direction, which, at first, brought tranquility to investors.

Raphael Pacheco, from Guide Investimentos, pointed out that the CEO’s speeches were measured and did not threaten the company’s pricing policy.

It should be noted that, as shown by Levante Ideias de Investimentos, the debate on the company’s current pricing policy has been taking place since the implementation of the pricing mechanism following market quotations, in 2017. This was “the initial period of the transformation of the Petrobras, after multibillion-dollar losses due to price controls in the period from 2013 to 2015, especially after the stoppages of truck drivers that strongly affected the national supply chain for a few days in May 2018”, analysts point out.

They point out that the agenda is complex and involves one of the most strategic products for the country (fuels) and involves several sectors of the economy, in addition to having a great influence on tax collection by states and municipalities, involving many “interested” in several tips, each with its interest and claims regarding the subject.

Silva e Luna said during the hearing at the Chamber that not all changes in fuel prices are directly related to the actions of the state-owned company. “When there is a fluctuation in prices, it does not mean that Petrobras had any action on the price”, he pointed out.

According to him, the part that corresponds to the state-owned company is approximately R$ 2, considering a price of R$ 6. “What impacts are the ICMS and other federal taxes, such as PIS and Cofins”, he commented.

The formation of fuel prices is composed of the price charged by Petrobras at refineries (the highest margin), plus federal (PIS/Pasep, Cofins and Cide) and state (ICMS) taxes, in addition to the cost of distribution and resale. There is also the cost of anhydrous ethanol in gasoline, and diesel has the impact of biodiesel.

He also praised the work of the oil company, recalling that the company had three moments of overcoming difficulties. For the general, the company continues to be important and exceeds the production of 2 million barrels of oil per day. “It is a very, very well controlled company”.

Luna affirmed that the company contributes to Brazil, especially in these challenging times and stressed that, in two years, the state-owned company paid R$ 546 billion in taxes.

And, after hearing many criticisms about the rise in fuel prices, the president of Petrobras pointed out that the strong dollar makes all commodities more expensive.

The president of Petrobras also said that he is in a hurry for Brazilian reserves to be transformed into wealth. “We are going to produce more and more”, he predicted. According to the general, the state-owned company had a difficult time, but it has already left this phase and, directly to the Brazilians, said: “be proud of Petrobras”.

Silva e Luna also pointed out that two refinery sales were frustrated, but that the project will be resumed. In addition, he highlighted that another four are underway.

Finally, he pointed out that he will remain in charge of the state-owned company to complete the mission given by President Jair Bolsonaro. “I am still in charge of Petrobras, and with great pride. I sleep with a clear conscience,” he said. He also stated that President Jair Bolsonaro has never directly intervened in the company since he took charge of the state-owned company and that his actions are only carried out by means already provided for by law.

According to Bradesco BBI, the CEO of Petrobras was very firm in his answers and emphasized that, after several years of financial recovery, the company was ready to repay society through dividends.

“He also highlighted that Petrobras pays around R$20 billion in annual dividends to the government (in line with our estimate) and also around R$540 billion in royalties, and that the government must know what to do with these resources. . The CEO also highlighted that fuel parity is an important pillar for the company to continue investing in platforms and avoid production declines. Overall, we believe that the CEO was very clear about the path ahead of the company”, highlighted BBI.

It should be noted that Bradesco BBI has a recommendation equivalent to the purchase of the company’s shares, but recently changed the order of preference of shares in the sector amid the more volatile scenario in Brazil (learn more by clicking here).

Discover XP’s action plan for you to transform the challenges of 2022 into investment opportunities.