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Change in Petrobras price policy

Petrobras announced today the sixth change in its policy of gas price readjustment since joining the international market in October 2016

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The refinery’s liter value could be frozen for up to 15 days instead of daily changes, as it had been since July last year. To avoid losses, the company will use financial instruments of protection – the purchase of gasoline derivatives on the New York Stock Exchange and the currency hedge in Brazil.

With derivatives, it prevents the price fluctuations of the fuel while keeping its prices unchanged. Thus, even if it loses money for a few days because it does not readjust the gasoline while the commodity rises in the foreign market, it gains with the derivatives in the same proportion. In the end, the balance between losses and gains is zero, and the customer is benefited by not having to deal with the daily variations of the price.

“Due to the volume of this market, the maximum we can achieve financial efficiency is in periods of up to 15 days (price maintenance). It will not be every 15 days (that readjustments will happen). It could be five, six, seven, eight days …, “state Finance director Rafael Grisolia told a news conference to detail the new gas pricing mechanism. Already on Thursday the state reported the price of gasoline that will be valid from Friday, of $ 2.2069 per liter, the same of the last two days, which means a stability of at least three days.

The changes will not interfere, however, with the size of the readjustments that Petrobras will apply from now on. The commodity highs in the international market will continue to be passed on to customers. Only deadlines change. “What this tool is taking away is the volatility. The delta (price change) at the end of the periods remains,” said the director of Refining and Natural Gas, Jorge Celestino. Therefore, the consumer will continue to pay at the stations an amount equivalent to that charged in the international market, but will feel less of this transfer, because they will only happen from time to time, within a limit of 15 days. The policy of international parity is maintained, reinforced the directors of Petrobras.

The frequent revisions of Petrobras prices caused the truck drivers to stop at the end of May of this year. Amid the political scuffles of the strike, the then president of the state company, Pedro Parente, resigned and was replaced by the Chief Financial Officer, Ivan Monteiro, who now runs the company.

Asked if the use of the new financial tools is related to the proximity of the elections and rumors of a new truck stoppage, the directors of the state company did not deny. But they said the measure had been under review for a long time. “We studied and saw that the use of this tool brings the elements that will give Petrobras a good competitive position and maintains, through the use of a financial instrument, its daily pricing policy in line with international prices,” argued Celestino.