Reducing the price of LPG this Friday is the right strategy for Petrobras, say analysts

The expectation is that further reductions in fuels and oil derivatives will occur again next week, maintaining the state-owned company’s strategy of making small adjustments gradually.

Pedro Ventura/Brasília AgencySeveral gray and yellow gas cylinders next to each other
13-kilogram gas cylinder is 6% cheaper at Petrobras refineries this Friday, costing just over R$49

Specialists consulted by Jovem Pan believe that the Petrobras is in the right direction by gradually reducing the prices of oil derivatives in the Brazilian domestic market on a weekly basis. Starting this Friday, the 23rd, the liquefied petroleum gas (LPG), known as cooking gas, weighing 13 kilos, is 6% cheaper at the state-owned refineries, costing just over R$49. Earlier this week, there was also a reduction in the price of a liter of diesel and, last week, of a liter of gasoline . Since President Caio Paes de Andrade took over Petrobras at the end of June, there have been successive price reductions due to the international situation, as the barrel of Brent oil, used by Petrobras as a reference, is operating in the US. $90 depending on market volatility. However, there are still many uncertainties caused by Russia’s war in Ukraine. If the company’s decision is maintained and the international scenario continues with the same behavior, experts say that there should be further reductions in fuel prices next week.

Second Pedro Rodrigues, director of the Brazilian Infrastructure Center, in this scenario, the most natural thing is to make price adjustments on a weekly basis. “This strategy of applying weekly reductions in small percentages also seems to me to be an intelligent, commercial strategy, given that the price of derivatives is still very volatile in the international market (…) It may happen, in the future, to have a very large percentage to be paid. passed on in the decrease [do preço], but the converse is also true, it may be that the price is increased. And if this transfer is not done gradually, in small percentages, it may be that, in the future, we will have a very large increase in prices”, says Rodrigues.

The Economist Aurélio Valporto, president of Abradin, an association that brings together minority shareholders of publicly traded companies, agrees with Pedro Rodrigues’ assessment, although he is a staunch critic of the price parity policy adopted currently, and since 2016, by Petrobras. “At first, it looks like we should celebrate. But not quite. Petrobras has been charging Brazilians much higher than the prices charged on the international market. The Brazilian pays about 30% more for gas than the German, which imports more than 50% of its gas from Russia, a country at war. Speaking of Russia, there, the gas is about 5% of that practiced here in Brazil, that is, 20 times cheaper. Petrobras ended up being pressured by CADE [Conselho Administrativo de Defesa Econômica] and by the STF [Supremo Tribunal Federal], because it has not followed its own pricing policy, the PPI. Gas should have been cheaper for Brazilians a long time ago”. defends Valporto.

*With information from reporter Rodrigo Viga

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