* Higher oil price needed to fund huge investment plans
* Conflicts energy minister statement ruling out rise
RIO DE JANEIRO, June 15 Brazil's fuel prices
will need to rise in order for state-controlled oil company
Petrobras to be able to make the huge investments it
announced this week, its CEO, Maria das Gracas Foster, said on
Brazil's government has forced the company to hold fuel
prices steady since 2008, hitting its profits and cash flow.
The company announced a new five-year investment plan on
Thursday for the 2012-2016 period with a budget of $236.5
billion, 5 percent more than that of the 2011-2015 plan but it
lowered its targets for oil and gas output as costs rise.
Foster said savings on the cost of fuel imports from falling
international oil prices had been negated by the weakening of
the Brazilian currency, the real, which has lost about 9 percent
of its value in the last year.
Though domestic crude output has risen in recent years, lack
of refining capacity means Latin America's largest country
depends on imports to meet its fuel needs in full.
Foster has commented publicly on several occasions about the
need for fuel prices to rise but government officials have made
The energy minister Edson Lobão said on Wednesday that the
decline in benchmark crude prices meant there is no
chance of a fuel price increase this year. See:
(Reporting by Leila Coimbra; Writing by Peter Murphy; Editing
by Gary Hill)