BRASILIA Dec 8 Brazil's state-run Petroleo
Brasileiro SA could raise fuel prices next year using
its new pricing formula, Chief Executive Maria das Graças Foster
told a local newspaper in an interview published on Sunday.
The Rio de Janeiro-based company, known as Petrobras, late
last month raised fuel prices less than expected and announced
it was adopting a new policy to adjust prices to be more in line
with international ones.
However, the company declined to detail the formula,
disappointing investors worried about Petrobras's financial
health after it suffered heavy losses due to a fuel subsidy.
Petrobras shares plunged last week to its lowest level in nearly
Petrobras imports fuel to meet domestic demand and sells it
at below-market prices as part of government efforts to control
inflation, leading to hefty losses in its refining division.
"I expected a greater understanding from the market given
the tremendous progress we made" with this formula, Foster told
the daily Folha de Sao Paulo. "We need time to explain and
quantify the effects of this new methodology."
When asked if the company planned price increases next year,
Foster said that it is "possible" under the new formula.
Foster added that the company never planned to make the
formula public, which is in line with other companies' pricing
policies that remain secret to protect commercial interests.
The company has been under heavy pressure from investors to
hike fuel prices to avoid further losses, but the government, as
the controlling shareholder, has kept prices stable to help it
ease inflation that remains well above the center of the
official target of 4.5 percent, plus or minus 2 percentage
Petrobras, whose 13 Brazilian refineries have a monopoly on
fuel processing in the country, raised gasoline prices by 4
percent and diesel by 8 percent on Nov. 30. In the third
quarter, domestic gasoline was 18.9 percent below world prices
and diesel 20.1 percent below, according to Planner Corretora, a
Sao Paulo securities brokerage.