Petroleo Brasileiro SA, Brazil’s state-controlled oil company, is generating enough cash flow to cover investments with current oil prices and the local exchange rate, and doesn’t have a time frame for an increase in domestic fuel prices.
Petrobras, as the Rio de Janeiro-based producer is known, won’t need a fuel price increase if international crude prices fall like they did in 2009, Chief Executive Officer Maria das Gracas Foster told reporters in Brasilia today. She said the company expects to increse fuel prices eventually.
“Lets assume that Brent falls, like it did in 2009, we won’t have a fuel price increase,” Foster said. “What I’m making absolutely clear is that today there is a perfect harmony between Petrobras’s healthy cash flow and its capacity to invest.”
Petrobras’s refining division posted a record 17.3 billion reais ($8.3 billion) in losses during the first nine months of this year, mainly because it sells imported gasoline and diesel below cost as part of the government’s efforts to control inflation. The government controls Petrobras’s board with a majority of voting shares.
Petrobras fell 2.7 percent to 18.62 reais in Sao Paulo, the lowest in four months. The stock is down 13 percent this year, compared with a 0.9 percent drop in the benchmark stock index. Brent for January settlement advanced 88 cents, or 0.8 percent, to $110.71 a barrel on the ICE Futures Europe exchange in London.