Petrobras Announcement on Gasoline Price Reduction

How Will Gas Station Owners React to Petrobras’ Announcement on Fuel Price Reduction

Petrobras announced it will reduce the gasoline price by 6.20% at refineries starting October 31, which will be the largest percentage cut ever announced by the company. With this change, the average price of the product at refineries will drop to R$ 1.8623 per liter, according to the company’s website. The average price of R$ 1.985 had been maintained since October 24, and with the new adjustment, the new price charged will be the lowest since June 27, when it was charged R$ 1.8783.

Amid the decline in oil prices is where the gasoline reduction occurs, and the dollar has fallen more than 8% in the partial for October. Futures contracts for oil are dropping and pressured by concerns that the trade dispute between China and the USA could harm economic growth and by signs of growth in global supply.

Adopting a new format in policy, Petrobras has been adjusting prices since July 3 of last year. With this new methodology, adjustments occur more frequently, reflecting mainly the international price of a barrel of oil and the exchange rate.

The adoption of the hedge mechanism implemented by Petrobras allows the company to hold product prices at refineries for up to 15 days, avoiding inconsistencies for consumers.

Diesel prices also dropped this Tuesday (30), falling by up to 10.44% varying by region, and the new values are valid until November 28. The commercialization value of diesel for Petrobras and other agents participating in the program, covering some suppliers, was frozen in June at R$ 2.0316 per liter, after closing the agreement with truck drivers to end the strike.

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