Petrobras execs deny strategy change after Bolsonaro criticizes profits, fuel prices

(Reuters) – Executives at Brazil’s Petrobras (PETR4.SA) on Friday effectively brushed aside suggestions that the company was too profitable and should lower its fuel prices, telling analysts that it had no plans subsidize consumers at the pump.

Claudio Mastella, the company’s logistics chief, said on a call to discuss Petrobras’ third-quarter financial results that the firm continues to price its fuel in line with the international market and has no plans to change its pricing policy.

Chief Executive Joaquim Silva e Luna said that Petrobras does not pursue “profit for profit’s sake,” but does so to give back to society in the form of taxation, investment and dividend payments, including to the federal government, its majority shareholder.

“In 2021, solid results will allow Brazilian society, through the federal government, to receive 23.3 billion reais ($4.14 billion) in dividends. Those are resources that will allow the maintenance of public policies for all Brazilians and will specifically benefit the most vulnerable,” he said.

The executives’ comments came the day after Brazilian President Jair Bolsonaro said Petroleo Brasileiro SA, as the company is formally known, was too profitable and that he would seek a way to change how it sets fuel prices domestically. read more

The company’s policy of pegging domestic fuel prices to international prices is angering Brazilians amid rising Brent prices , and many politicians have said the company should help shoulder the burden.

Shortly after Bolsonaro’s comments on social media on Thursday night, Petrobras posted a third quarter profit of 31.18 billion reais, smashing analysts’ estimates. read more

Later on Thursday evening, Senate President Rodrigo Pacheco said he would schedule a meeting with Petrobras’ executive board to see how the firm could keep fuel prices down.

Brazil-listed preferred shares in Petrobras were off 3.7% in early afternoon trade. Brazil’s benchmark Bovespa equities index (.BVSP) had fallen 0.8%.

($1 = 5.63 reais)

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