Petrobras yields to pressure: change in fuel price policy relieves consumer pockets, truck drivers, taxi drivers and app drivers who depend on ethanol, gasoline and diesel to work

Gasoline, diesel and ethanol are cheaper at gas stations with Petrobras' new pricing policy

You may have noticed by now that the fuel prices are lower in recent days. This is due to a decision by Petrobras to change the way it calculates the value of gasoline, ethanol and diesel. But what does this mean for you, the consumer? And for the country's economy? Keep reading and understand about this change and how it can impact your life.

Until recently, Petrobras followed a model called international price parity (PPI). This means that it adjusted fuel prices in Brazil according to changes in the dollar and in the international oil market. Thus, if the dollar rose or if oil became more expensive abroad, prices here would also rise. And vice versa.

This model was adopted in 2016, during Michel Teme's governmentr, with the aim of recovering the finances of Petrobras, which was indebted and involved in corruption scandals. The idea was to make the company more competitive and attract private investors.

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Petrobras was accused of charging abusive prices and harming truck drivers and consumers in general

On May 19, 2023, Petrobras announced that it would abandon the PPI model and adopt a new pricing policy, based on production costs and domestic market demand. The company said that this change aims to “ensure greater price stability” and “avoid unnecessary transfers to the consumer”.

The decision was taken after a series of criticisms and pressure from the federal government, which accused Petrobras of practicing abusive prices and harm truck driverswhether consumers in general. President Jair Bolsonaro even dismissed the former president of the company, Roberto Castello Branco, in February this year, and appointed general Joaquim Silva e Luna to the position.

Readjustment in the price of gasoline and diesel no longer depend on fluctuations in the dollar and oil abroad

The main advantage of the change is that fuel prices tend to be lower and more stable in the short term, as they will not depend on fluctuations in the dollar and oil abroad. This can benefit consumers, who will spend less to fuel their vehicles, and sectors that depend on road transport, such as agribusiness and commerce.

In addition, the change can reduce inflation, which is the general increase in prices in the economy. Fuels have an important weight in the calculation of inflation, as they influence the production and distribution costs of various products and services. With lower and controlled prices, inflation tends to decrease.

New policy may affect the company's investments in oil and gas exploration and production, compromising its financial sustainability

On the other hand, change also has disadvantages and risks. One of them is that Petrobras may lose profitability and competitiveness in the long term, as it will no longer keep up with international prices and will depend more on conditions in the domestic market. This could affect the company's investments in oil and gas exploration and production, compromising its financial sustainability.

Another disadvantage is that the change could generate a negative perception of Petrobras and Brazil by foreign investors. They may understand that the company is suffering political interference from the government and that it does not have the autonomy to set its prices. This can drive investors away and reduce the value of the company's shares on the stock exchange.

Change eases the consumer's pocket and may have a positive impact on income distribution in the country

To better understand the implications of the change in Petrobras' pricing policy, we spoke with Marcos José Valle, professor in the Bachelor of Economic Sciences course at the Escola Superior de Gestão, Comunicação e Negócios da uninter. He explained to us the pros and cons of this decision and how it could affect the national economy.

According to him, the change brings benefits to the national economy in the short term, but also brings uncertainty for the future. "Petrobras will still continue to have excellent profitability, but it will work with real profit and no longer extraordinary profit", he said.

He also pointed out that the change could have a positive impact on income distribution in the country. “With lower fuel prices, there is a reduction in the cost of living for the poorest people, who spend proportionately more on transport. This can increase the purchasing power of these people and stimulate consumption, ”he said.

Finally, he stressed that the change does not mean that fuel prices will remain frozen or immune to market fluctuations. “Petrobras will still make periodic price adjustments, but with less frequency and based on more transparent criteria. The consumer will still feel the changes in prices, but more smoothly, ”he concluded.