Brazil's Petrobras hikes gasoline and diesel prices

2 minute read

The Petrobras logo is seen in front of the company's headquarters in Sao Paulo April 23, 2015. REUTERS/Paulo Whitaker/File Photo

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SAO PAULO, July 5 (Reuters) - Brazilian energy giant Petrobras (PETR4.SA) announced on Monday that it will raise gasoline and diesel prices, the first price hike for the fuels under new Chief Executive Officer Joaquim Silva e Luna.

The increase comes amid the highest consumer price inflation rate in Brazil in nearly five years, which is squeezing consumers' spending power and forcing the central bank into an aggressive cycle of interest rate hikes.

The average price of gasoline at refineries will rise by 16 centavos to 2.69 reais per liter, marking a 6.3% increase, while diesel will rise by 10 centavos, or 3.7%, to 2.81 reais per liter, Petrobras said in a statement.

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This "follows the rise in international prices for oil and oil products," added Petroleo Brasileiro SA, as the firm is formally known.

Since Luna assumed the presidency of the company in April, Petrobras had reduced gasoline prices twice, and cut diesel prices once.

Luna in April replaced Roberto Castello Branco, who was ousted by President Jair Bolsonaro for hiking diesel prices and ignoring truck drivers' complaints about rising fuel costs.

Annual inflation in Brazil is currently running above 8% and is expected to rise even further before easing back in the second half of the year. Energy and fuel costs are among the main reasons for the near-five year high in inflation.

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Reporting by Roberto Samora Writing by Jamie McGeever, Editing by Franklin Paul

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