Petrobras can act independent of the state: CEO
The head of Brazil's Petrobras told the Reuters news service on July 7 that a rate hike on natural gas prices would be enacted without state consultations, demonstrating the national oil company's independence.
CEO Joaquim Silva e Luna said that Brazilian president Jair Bolsonaro was neither consulted nor informed about its decision this week to raise prices.
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Petrobras, formally Petroleo Brasileiro, announced June 6 that it would raise prices by 7% in terms of reals/m3. Contract prices are updated quarterly and recent increases in the price of crude oil, coupled with depreciation of the Brazilian currency, warranted an adjustment, it said.
The company added, however, that the final price is determined by taxes, tariffs and distributor margins, on top of what it sets as a base rate.
Bolsonaro, however, has expressed frustration with pricing decisions made by Petrobras in the past. In April, the president said a 32% increase in natural gas prices imposed by Petrobras on distributors was unacceptable.
State-owned Petrobras replied by saying it did reach out to the Brazilian ministry of mines and energy for any material information that should be released to the market about the readjustment in gas prices and possible changes to its pricing policy, but got no reply.
The company in 2018 opted to peg domestic prices to the international market, leading to the resignation of CEO Pedro Parente after widespread protests by truckers against the decision. In February, Bolsonaro fired his successor Roberto Castello Branco out of frustration with the company’s decision to hike fuel prices. Branco was replaced by Luna, a 71-year-old military general and former defence minister with no experience in the oil industry.
Petrobras announced April 5 it was making adjustments to reflect the early-year spike in commodity prices.