Petrobras approves revision of LPG pricing policy

August 5, 2019

Petróleo Brasileiro S.A. – Petrobras reports that its Executive Board has approved revision of its LPG pricing policy for residential use, sold for bottling in cylinders of up to 13 kg, including smaller capacity cylinders, such as 5 kg and 8 kg, which meet the demand for lower volumes.
Prices charged by the company will adopt the import parity price (IPP) as reference, similar to the industrial/commercial LPG, which includes the price of LPG in the international market (Gulf of Mexico, for example) plus maritime freight costs, internal transportation expenses, and a margin to offset the risks associated with the operation.
This will allow for a greater alignment of prices of industrial/commercial and residential LPG bottled in cylinders of up to 13 kg (P13), but still complying with Resolution 4/2005 of the National Council of Energy Policy (CNPE), which “recognizes – as of interest to the national energy policy – the sale, by producer or importer, of liquefied petroleum gas (LPG), intended solely for residential use in transportable containers weighing up to 13 kg, at differentiated prices and lower than those charged for other uses or stored in containers of different capacities.”
Prices of LPG for industrial use and P13 were adjusted today and are now priced R$1,953.10/ton and R$1,853.70/ton, respectively. These values represent average reductions of 13.3% in the price of industrial LPG and 8% in the price of cylinders of up to 13 kg.
In the new LPG pricing policy, adjustments are now made without defined periodicity, according to market conditions and analysis of internal and external environments.
These changes extinguish the offset mechanism for the price of bottled LPG in cylinders of up to 13 kg, provided for in the policy disclosed on 01-18-2018, which considered the moving average of prices of the last 12 months.

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