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Ongoing Legal Controversy Challenges Petrobras' Recent Pricing Methodology, According to Investor Defense Lawyers
Lawyers Adilson Bolico and Rafael Mortari, partners of the legal firm Mortari Bolico, known for acting in this modality in defense of individual investors in the financial market, presented an emergency precautionary measure to the Federal Court of São Paulo. The demand is for Petrobras to invalidate the recent approach to setting fuel prices and return to employing the International Parity Plan (IPP) as reference.
Instituto Empresa assists in the claim
The legal campaign is supported by Instituto Empresa, an investor group that focuses on Corporate Governance and Investor Protection. The objective is for the old method to be implemented again until the government and Petrobras' new management are able to assure society and opinion makers about the stability and transparency of the new model. The trial of the precautionary measure is expected in the coming days.
Issues Raised in the Popular Action
In defense, the signatories argue that there was a clear disconnect between the pricing policy and the cost matrix, a significant risk for the company's future. “The only thing evident in the significant statement issued to announce the new regime is that investors will no longer have the ability to predict the company's future profit or loss,” says Bolico.
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The petition requests that Petrobras disclose, without delay, a simulation that shows the effect on the cost of an appreciation of the foreign currency and how the intended new methodology would react in terms of prices. “Since Brazil still depends on oil import and inputs from abroad, it is impossible to ignore that the cost is directly affected by the dollar rate and by external factors”, adds Mortari.
Concerns related to the new fuel pricing methodology
They fear that the government could start using the new formula as an inflation control mechanism, which would be inconsistent with its role as Petrobras' controlling shareholder, whose objective should be the benefit of the company itself and other shareholders.
“Establishing prices that are not backed by cost will reduce interest in the company, cause a loss in the value of its assets, in addition to reducing or eliminating the payment of dividends due to the drop in profits. In 2022 alone, the Government received more than R＄ 55 billion that were invested, at its discretion, in social programs and actions. This type of benefit to society cannot be put at risk”, warns Mortari.
Demand for Justice Transparency
The Action concludes by asking the court to analyze the records of investigations opened by the Administrative Council for Economic Defense (CADE) on the matter. The agency evaluates cases initiated by Acelen, the largest private refinery in Brazil, and by RefinaBrasil, the Association of Private Refineries.
About the firm Mortari Bolico
Created in 2016, the firm Mortari Bolico has specialized in investor defense since 2019. Being responsible for the first collective arbitration of individuals in the country's major capital market, the firm defines its activities by the slogan “Investors defending investors”. The firm carries out actions that aim to bring legal certainty to investments, whether in the financial market, in the real estate sector or in companies. For more information access: Link
