Petrobras weighs fuel pricing as oil turmoil deepens

March 9 (valorinternational.globo.com) Uncertainty stemming from the conflict in the Middle East still makes it impossible to identify a clear oil price trend, but Petrobras’s pricing policy will not change because of the crisis, company executives said in assessing the current geopolitical environment and its effects on Brazil.

They said, however, that the oil giant has begun monitoring price movements more closely amid sharper volatility since the United States and Israel bombed Iran just over a week ago.

Brent crude closed Friday (6) up 8.5% at $92.69 a barrel, bringing its weekly gain to 27%, and continued to rise. On Sunday, it broke through the $100 mark, something not seen since 2022, during the conflict between Russia and Ukraine.

One impact of the conflict on Brazil is mounting pressure on diesel prices and supply, since about 25% of domestic demand for the fuel is met through imports.

The uncertainty is increasing pressure on Petrobras to adjust fuel prices because domestic prices are below international levels. The Brazilian Association of Fuel Importers, known as Abicom, estimated on Friday, the latest available data, that Petrobras refinery prices would need to rise 64% for diesel and 27% for gasoline to match prices abroad.

Petrobras has not changed diesel prices in more than 300 days, since May 2025, when it cut them by 4.66%. The state-owned oil company last changed gasoline prices on January 27 this year, when it reduced them by 5.2%.

The last time Petrobras raised diesel prices was in early February 2025, when it increased them by an average of 6.29%. Gasoline last rose in July 2024, by 7.12%.

On Friday, in a conference call with analysts and in a separate interview with reporters, both focused on quarterly and full-year 2025 results, executives discussed the war’s impact on the Brazilian market.

Petrobras Chief Executive Magda Chambriard said the company is seeking answers to questions about the future direction of Brent prices. If oil rises too sharply, the scenario will require “faster responses” from Petrobras, she said.

No return to daily price changes

Chambriard said there is no sign that the company’s pricing policy has failed, responding to questions about its decision not to adjust fuel prices. She added that the policy of “nervous passthroughs” of oil price swings is “a thing of the past,” referring to the previous pricing model, which tracked international parity.

Petrobras Trading and Logistics Director Claudio Schlosser agreed. “We have already seen that making daily adjustments, as was done in the past, does not work,” he said. Under the company’s current pricing policy, national parameters are taken into account in addition to Brent crude prices and the dollar exchange rate.

Still, Chambriard said Petrobras has started reviewing price conditions daily without passing through exaggerated volatility. “We cannot send the wrong signal and scare society unnecessarily,” she said.

Chief Financial and Investor Relations Officer Fernando Melgarejo said that “no one knows what the new Brent price level is,” which makes it harder to assess the moment. “We continue to watch prices and our position,” he said.

Even without Petrobras changing prices, fuel price increases are already being seen at gas stations.

That is because distributors also buy fuel from private refineries and fuel importers, whose prices are more closely aligned with the international market.

The National Federation of Fuel and Lubricants Trade, known as Fecombustíveis, said fuel prices at retail stations are subject to higher costs of acquiring products from distributors and importers, which then affects prices for end consumers.

Citi said in a report that Petrobras’s ability to capture gains from the current global oil rally will be limited, since management has signaled it does not intend to pass external volatility through to domestic refineries unless there is a risk of supply shortages.

Supply concerns

Domestic supply, however, is not something that worries Petrobras. Schlosser said there are no risks to the oil imports the company makes to support its operations.

Petrobras imports a specific grade of crude from Saudi Arabia that is used to produce lubricants.

Schlosser said the company has managed to transport the product through the Red Sea, an alternative route to the Strait of Hormuz, which Iran blocked after the conflict began. He added that the company has significant inventory of the product.

Brazil’s National Agency of Petroleum, Natural Gas and Biofuels, known as ANP, said it is monitoring diesel supply in the country, especially in Rio Grande do Sul state, where isolated difficulties in diesel purchases by farmers have been reported.

The agency said it is inspecting the facilities of distributors operating in the region, which will be notified to clarify inventory volumes and orders received and accepted.

For Chambriard, the company needs to be prepared for every oil scenario. “We are living through a period of high geopolitical instability, with concern about keeping the company ready for any oil price. We have to be prepared for a barrel at $85 or at $55,” she said.

This article was translated from Valor Econômico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.