Petrobras, Brazil govt discussed fuel price cut to offset tax resumption – sources

(Reuters) – Brazil’s state-run oil giant Petrobras (PETR4.SA) and the federal government have discussed the possibility of the firm reducing fuel prices as a way to offset the resumption of taxes levied on fuel, two sources familiar with the matter said.

The finance ministry announced on Monday the government was set to resume this week the collection of federal taxes on fuels, ending a waiver set by former President Jair Bolsonaro last year.

According to the ministry, the rate on fossil fuels would be higher than that levied on biofuels, but the government would still recover 100% of tax revenues that had been waived since 2022.

As a way of offsetting the impact on consumers’ pockets, according to the sources, the government and Petrobras discussed at a meeting on Monday the possibility of the company cutting its own prices.

The people, who asked not to be named, said the parties see room for the firm to reduce both gasoline and diesel prices as local rates have been higher than those in international markets.

“There is room for compensation within the import parity policy,” one of the sources said, referring to Petrobras’ official policy of tracking international rates such as global fuel prices and foreign exchange.

The meeting at Petrobras headquarters in Rio de Janeiro was attended by a government official and Petrobras executives. The price cut is seen as a temporary solution for the very short term, one of the sources said.

In a securities filing following the report, Petrobras said that adjustments in product prices were made “in normal course of business” and following its current commercial policies.

The company, formally known as Petroleo Brasileiro SA, reiterated it was committed to “competitive prices in balance with market”.

The finance ministry did not immediately respond to a request for comment.

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