Petrobras CEO says no pressure from govt on fuel prices
(Reuters) - Brazil's Petrobras was not pressured by the federal government to refrain from raising local fuel prices, its CEO said, after the state-run oil company announced a major hike in gasoline and diesel prices to track an "abrupt" global spike.
The move was welcomed by investors but is likely to upset the government, which has vowed to keep prices at the pump affordable, and brings renewed inflation fears just as the central bank started lowering interest rates.
Petrobras had been operating at discounts to international rates for weeks and until the price hike announced on Tuesday, markets had speculated on government interference.
The price increase, which would raise average gasoline and diesel prices by 16.3% and 25.8% respectively, is the first by the oil giant since a new pricing policy was implemented under President Luiz Inacio Lula da Silva in May.
The president took office in January, pledging to change the firm's strategy to prioritize consumers over blockbuster returns for investors.
Chief Executive Jean Paul Prates said in an interview with GloboNews late on Tuesday he received no pressure from Lula to avoid adjusting prices.
"It's very important to say that at no time did he urge, influence or suggest any price movement, up or down," Prates said. "When he appointed me to the job, it was a move of absolute trust: 'You know what to do, so go and do it.'"
Prates said the weeks Petrobras spent without increasing prices were to avoid passing international volatility onto customers, as the new policy intended.
However, as global oil prices consolidated at higher levels following seven weeks of gains, Petrobras had to hike local prices to avoid losing money, the executive added.
"The new pricing policy has been efficient and already helped us a lot in fighting volatility," Prates said.
"It was a fair price adjustment and I think our policy has passed the test, given a lot of people were skeptical about whether Petrobras would raise prices if oil prices went up."
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