Ativa Investimentos Estimates That Petrobras Needs to Raise Gasoline Prices by 6% to Eliminate the Gap Between Fuel Prices in the Country and Its International Quotation

Next Move by Petrobras Will Define the Company’s Strategy Regarding Gasoline Prices

Consumers need to prepare their wallets once again! According to the technical study by Ativa Investimentos, to eliminate the gap between the fuel price in Brazil and international prices, the Brazilian oil company Petrobras will need to raise gasoline prices by 6%.

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“In recent adjustments, Petrobras made increases leaving, on average, a 14% upward potential behind, which we attribute to a timing gap in the correction,” assesses the chief economist at Ativa Investimentos, Étore Sanchez.

Petrobras’ Next Adjustment, or Lack Thereof, Will Be Relevant for Gasoline Behavior in the Coming Months

According to the brokerage, hypotheses are circulating that Petrobras’ benchmark is not the complete elimination of the shortfall, but a lower level, in order to ensure market share. “If this hypothesis is correct, it would be as if the parity should be calculated with the international price plus a discount on the market share proposed by the company,” explains Sanchez.

If Petrobras is incorporating this discount into its calculations, there could be a reduction in gasoline prices in the coming days. “In the long term, the strategy could generate arbitrage, but in the short term, it is completely feasible,” explains the chief economist at Ativa.

Despite this, Ativa does not believe in new adjustments at the moment. And Petrobras’ next move will ultimately define what the company’s strategy is.

“In any case, the next adjustment, or its absence, will be very relevant for adjusting our perspectives on gasoline behavior in the coming months. If the next adjustment is downward, despite the upward potential, it reinforces the hypothesis of market share. If it remains unchanged and/or we have an upward adjustment, it reinforces the hypothesis about the timing gap (waiting for stabilization),” says Sanchez.

To Escape Petrobras’ High Prices, Brazilians Rush to Buy Gasoline at Half the Price, and Fuel is Limited to 15 Liters to Prevent Shortages in Puerto Iguazú

The Argentine government has decided to limit the sale of gasoline in the city that borders Brazil. The measure aims to curb the rush of Brazilians to the gas stations in Puerto Iguazú, a town neighboring Foz do Iguaçu in the state of Paraná. The demand is so high that gas stations have begun accepting payment in reais, rather than Argentine pesos.

The sale of gasoline to foreigners is limited to 15 liters to prevent shortages in the Argentine city, as the price of gasoline in Puerto Iguazú (Argentina) is nearly half the price found in the neighboring city of Foz do Iguaçu (Brazil), where fuel is sold for an average of BRL 6.90.

In addition to Brazilians, Argentine gas stations have also attracted Paraguayans, who have paid approximately BRL 4.10 per liter of gasoline. The idea is to discourage Brazilians and Paraguayans from fueling there, as the stations have a maximum quota.

The stations were already separating buyers into foreigners and Argentines, with exclusive lines for each category, and now comes this new decision from the stations.

This measure was taken in consensus, after complaints from local residents about long lines forming at the stations since the border opened. Read the full article here.