In 2021, price of diesel at Brazil’s refineries has increased by 65.5%; that of gasoline by 74.8%

RIO DE JANEIRO, BRAZIL – By announcing new readjustments for fuels on Monday, Petrobras has already accumulated a 65.5% increase in the price of a liter of diesel since the beginning of the year. In the case of gasoline, the increase is 74.8%, according to Valor Data.

The increase comes amid a threat of a new strike by truck drivers, at a time of intense inflationary pressure on fuel prices, due to the rising cost of oil barrels on the international market.

At the pumps, according to data from the National Petroleum Agency (ANP), the increase for the final consumer, accumulated in 2021, until last week, was 34.15% for diesel and 39.34% for gasoline.

Under pressure, President Jair Bolsonaro announced last week an aid for 750,000 autonomous truck drivers. Dissatisfied with the state-owned oil company’s pricing policy, Bolsonaro had previously interfered in the change of command of the state-owned company.

The administration of Joaquim Silva e Luna has reduced the interval between readjustments and has not fully passed on the oil and exchange rate variations. Even so, Petrobras continues with its readjustments: under the general’s administration, diesel has already gone up 20.6% in the refineries and gasoline 21.45%.

On the other hand, fuel distributors and importers accuse the company of practicing prices below international parity. According to Credit Suisse, even with the high announced on Monday, the oil company continues with prices 11% below the import parity price (PPI). The consultancy Ativa still sees room for a 17% adjustment in gasoline.

Stonex calculates that, with the readjustment announced on Monday, Petrobras has reduced by half its gap to the international reference. The company continues selling the liter of diesel R$0.28 below the PPI. In gasoline, the gap is R$0.15 a liter.

“Private imports continue to be uninteresting, even with today’s readjustments. It has improved a little, but we are still in a scenario of supply under stress,” evaluates Stonex’s risk management consultant, Pedro Shinzato.

Regional distributors, represented by Brasilcom, alerted last week, to the risk of shortage, given the refusal of Petrobras to meet all orders from the companies.

The oil company, in turn, alleges that it will fully supply the volumes foreseen in the contract with the fuel distributors and that the company did not accept part of the extra orders for diesel and gasoline for November because it is unable to supply what is considered to be an atypical demand for the products.

Petrobras says it has received orders for the delivery of volumes equivalent to more than 100% of the current demand in the domestic market.