September 18, 2018 / 4:12 PM / 3 months ago

Brazilian diesel subsidy program threatens Petrobras, market -FCStone

RIO DE JANEIRO, Sept 18 (Reuters) - Brazil could face a diesel shortage at the end of this year or state-controlled oil company Petroleo Brasileiro may be forced to eat losses on fuel sales thanks to a faulty diesel subsidy program, analyst and broker INTL FCStone said on Tuesday.

The program, unveiled a few months ago to halt a truckers’ strike over rising diesel prices, set prices too low and has yet to pay out compensation to most diesel importers, FCStone said in a statement.

That means most companies have stopped selling the fuel, forcing Petrobras to supply most of the market at a loss and raising the specter of a shortage in the coming months, the commodity broker added. (Reporting by Alexandra Alper Editing by Paul Simao)

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