Brazil’s Petrobras target of investigation over fuel readjustments

RIO DE JANEIRO, BRAZIL – CADE has opened an inquiry to investigate evidence of economic violations by Petrobras in the fuel market.

The investigation is based on public documents and news reports about gasoline and diesel price hikes. The inquiry was opened on January 12 and is being handled by the agency’s General Superintendence.

On Monday, January 17, CADE sent Petrobras president General Joaquim Silva e Luna a letter requesting information on the state-owned company’s oil production capacity and costs over the past few years, as well as the methodology used to set prices.

The response to the document must be submitted by next Friday, January 21, under the penalty of a daily fine of R$5,000 (US$899).

CADE also reported that it is not responsible for monitoring the values of services and products, but rather to monitor market operations to prevent and identify potential anti-competitive practices.

In a statement, Petrobras said it remains committed to pricing in balance with the market, while preventing the immediate transfer of external volatility and exchange rate variations caused by circumstantial events.

Also according to the company, the prices practiced are in line with the dynamics of the commodities market in a context of free competition and in compliance with the law.

The company also states that Petrobras’ sale price to distributors is only a portion of the price perceived by consumers at the pumps.

Last week, the state-owned company announced a 4.8% increase in the price of gasoline and a 10.6% hike in the price of diesel sold at refineries.

Gasoline rose from R$3.09 to R$3.24 a liter. Diesel, which used to cost R$3.61, is now sold at R$3.34. The company says that these adjustments occur to prevent the risk of shortages.

The last increases occurred in October last year. In December, there was a reduction of R$0.10 in the price of a liter of gasoline at refineries.

According to the National Petroleum Agency (ANP), at service stations all over Brazil, the average price of regular gasoline rose 46.5% over the past year. The price of diesel increased 46.7% in 2021.

Since the start of the year, the prices of both diesel and gasoline have increased by about 1% at gas stations.