BRASILIA, Dec 8 (Reuters) - 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 three months.
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 points.
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.