Brazil Government Denies Report of Petrobras Fuel Price Increase

Brazil’s Energy Minister Edison Lobao today denied a report the government is studying plans to allow Petroleo Brasileiro SA to raise fuel prices to stem losses at the state-controlled oil company.

Lobao also denied today’s report from Valor Economico newspaper the government is considering plans to lower requirement for Petrobras to hold a minimum 30 percent stake in groups to explore pre-salt fields.

“There is no bigger help for Petrobras than assuring them a stake of the wealth that will be found in the pre-salt,” the minister told reporters in Brasilia. “There is no news regarding a fuel increase.”

Petrobras sells imported fuel at a loss as part of a government policy to control inflation, which has breached the central bank’s target range twice this year. Lobao told reporters Aug. 13 a fuel increase would hurt government efforts to contain consumer price increases.

Petrobras shares rose 4.2 percent to 17.66 reais at 1:14 p.m. in Sao Paulo.

Valor Economico columnist Claudia Safatle reported today the government was considering plans to allow Petrobras to gradually increase gasoline and diesel prices, citing an unidentified government official. The financial newspaper also reported the government was considering plans to change the law governing Petrobras’s 30 percent stake in pre-salt fields.

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