BRASILIA Aug 22 Brazil's President Dilma
Rousseff has not yet discussed raising gasoline and diesel
prices to support state-run oil producer Petroleo Brasileiro SA
, her spokesman said in response to local media
reports on Thursday.
A statement by spokesman Thomas Traumann discouraged
investors' hopes of an immediate fuel price increase, although
prices for gasoline and diesel were still widely expected to
rise in the next few months.
Local newspapers Folha de S. Paulo, Valor Economico and
Estado de S. Paulo reported that a decision to raise prices was
made on Wednesday, following meetings between Rousseff,
Petrobras Chief Executive Maria das Graças Foster, and Finance
Minister Guido Mantega, though they said the timing and size of
such a move was unknown.
Traumann told Reuters that Rousseff had not discussed the
matter, but did not comment further.
A rapid weakening of Brazil's real, which has lost 7 percent
against the U.S. dollar this month alone, has hurt Petrobras'
refining and fuels operations by making imports more expensive
and wiping out much of the impact of four hard-won domestic fuel
price increases in the last year.
Petrobras imports gasoline to satisfy domestic demand, but
sells it at a loss at the government's insistence to help keep
inflation at bay. Debt at the company has grown in the face of
The decision to raise prices was made in order to protect
Petrobras' investment-grade rating, Folha reported, adding that
the company suggested a staggered series of increases over time
as a way to dilute the impact on inflation.
Keeping its rating would be crucial to controlling the cost
of Petrobras' 249 billion reais ($101.6 billion) in short- and
long-term debt, Petrobras Chief Financial Officer Almir Barbassa
said last week.
Fuel prices in Brazil affect everything from shares in
heavily traded commodities firms to inflation dynamics.
Petrobras spokeswomen Mirian Guaraciaba said the company had
no comment on the reports. Petrobras shares were up 3.3 percent
in Sao Paulo's Bovespa index but briefly cooled after