SAO PAULO Nov 2 Brazilian President Dilma
Rousseff is yet to decide whether to allow state-run oil company
Petróleo Brasileiro SA to raise domestic fuel
prices by using a formula, her office said on Saturday in
response to a newspaper article saying a price hike may be in
Newspaper O Estado de S. Paulo, which cited an unidentified
presidential aide as the source, reported that Rousseff had
endorsed a plan tying domestic fuel prices to a series of
factors, and signed off on "two or three" annual price increases
to ensure that the company, commonly known as Petrobras, has a
predictable business plan for the years ahead.
In a statement, the president's office said reports that
Rousseff has discussed the matter were "baseless," adding that
she "has yet to issue an opinion on the subject."
"In fact, no document discussing the issue has yet reached
the office of the president. Therefore, it is speculative for
any report to say there is definition on the matter," the
Petrobras said this week that its new policy to set domestic
diesel and gasoline prices will automatically trigger
adjustments based on international prices, exchange rates and
other factors. The methodology will not allow full pass-through
of volatility of international oil prices, Petrobras said.
Calls to media officials at the mining and energy ministry
in Brasilia and Petrobras in Rio de Janeiro were not immediately
The new formula, once it is in place, will help Petrobras
smooth out short-term gaps between international and domestic
fuel prices that have triggered more than $10 billion in losses
at its refining division over the last couple of years.
The plan is expected to help Petrobras, ranked by some
analysts as the world's most indebted company, to cut debt that
has ballooned because of a government-mandated policy that the
company sell imported fuel at a loss to keep local prices low.