Brazilian Lawyers File Popular Action Against Petrobras to Resume Fixing Fuel Prices to the International Parity Price (IPP)

Ongoing Legal Controversy Challenges Petrobras’ Recent Pricing Methodology, According to Lawyers Defending Investors

Lawyers Adilson Bolico and Rafael Mortari, partners at the law firm Mortari Bolico, known for acting in this capacity defending individual investors in the financial market, have filed an emergency precautionary measure with the Federal Court of São Paulo. The request is for Petrobras to invalidate the recent approach to fuel pricing and return to employing the International Parity Price (IPP) as a reference.

Instituto Empresa Assists in the Claim

The legal campaign is supported by Instituto Empresa, a group of investors focused on Corporate Governance and Investor Protection. The aim is for the old method to be reinstated until the government and Petrobras’ new management can assure society and opinion makers about the stability and transparency of the new model. The judgment of the precautionary measure is expected in the coming days.

Issues Raised in the Popular Action

In their defense, the signatories argue that there has been a clear disconnect between the pricing policy and the cost matrix, a significant risk for the company’s future. “The only evident aspect in the significant statement issued to announce the new regime is that investors will no longer be able to predict the company’s future profit or loss,” says Bolico.

The petition requests that Petrobras reveal, without delay, a simulation showing the effect on costs of an appreciation of the foreign currency and how the proposed new methodology would react in terms of pricing. “Since Brazil still relies on oil imports and inputs from abroad, it is impossible to ignore that costs are directly affected by the dollar rate and external factors,” adds Mortari.

Concerns Regarding the New Fuel Pricing Methodology

They fear that the government may begin to use the new formula as a mechanism for inflation control, which would be inconsistent with its role as controlling shareholder of Petrobras, whose objective should be the benefit of the company itself and the other shareholders.

“Setting prices without backing by costs will decrease interest in the company, cause a loss of value in its assets, and reduce or eliminate dividend payments due to falling profits. Just in 2022, the Government received over R$ 55 billion that were invested, at its discretion, in social programs and actions. This kind of benefit for society cannot be put at risk,” warns Mortari.

Demand for Justice Transparency

The action concludes by asking the court to review the records of investigations opened by the Administrative Council for Economic Defense (CADE) on the matter. The agency is assessing cases initiated by ACELEN, Brazil’s largest private refinery, and RefinaBrasil, Association of Private Refineries.

About the Firm Mortari Bolico

Founded in 2016, Mortari Bolico has specialized in defending investors since 2019. Being responsible for the first collective arbitration of individuals in the country’s significant capital market, the firm identifies its actions with the slogan “Investors Defending Investors.” The firm carries out actions aimed at bringing legal security to investments, whether in the financial market, real estate sector, or companies. For more information, visit: Link