Nov. 30 (Bloomberg) -- Petroleo Brasileiro SA is increasing fuel prices as the world’s most indebted oil producer seeks to eliminate the gap between local and global values to help bolster profit.
An 8 percent increase for diesel and a 4 percent boost for gasoline aim to “make prices in Brazil converge with the international benchmarks, within a compatible period,” the Rio de Janeiro-based company known as Petrobras, said yesterday in a regulatory filing signed by Chief Financial Officer Almir Barbassa. The increase also seeks to “assure that debt and leverage rates return within 24 months to the limits established by the 2013-2017 Business Plan,” he said.
Petrobras said Oct. 25 that it had presented a proposal to its board to create a formula that would allow it to adjust fuel prices periodically without making consumers pay for fluctuations. The board had requested a revised formula.
Yesterday’s filing, which came hours after the end of the first board meeting since the revision request in October, didn’t include details of the formula. The price increases were effective as of midnight.
Brazil’s government, which controls Petrobras with a majority of voting shares, caps Petrobras’s fuel prices to contain inflation. Because of the limits, Petrobras isn’t allowed to increase prices of imported fuel in line with global increases, which contributed to the company’s third-quarter income sliding to $1.5 billion, the lowest since 2002. Brazil’s Finance Minister Guido Mantega is the company’s chairman.
Petrobras has increased prices for gasoline 15 percent and diesel 22 percent since June 2012 to reduce the discount with international prices.
Shares rose 2.5 percent to 19.12 reais in Sao Paulo yesterday, before the price increases were announced. The stock has returned investors 6.45 percent in the past year, about half the average gain of peers tracked by Bloomberg.
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