SAO PAULO: Brazilian state-controlled oil company Petroleo Brasileiro SA said on Wednesday that increasing volumes of diesel and gasoline imports by competitors have reduced its market share in the local fuel market.
Petrobras Refining Director Jorge Celestino told reporters during a press conference in Rio de Janeiro that the increase in fuel imports by other companies in Brazil in September and October forced it to reduce its refining operations. The oil company controls all the refineries in Brazil, but other companies are allowed to import and sell diesel and gasoline in the local market, which they have been doing on a larger scale recently. Data from Brazil’s Trade Ministry shows the country imported 655,867 tonnes of diesel in September, up sharply from the 136,216 tonnes in January.
Brazil’s currency has strengthened 18 percent this year, favoring imports. Petrobras reduced prices for diesel and gasoline on Tuesday for the second time in less than a month, trying to not lose market share. “Between our first cut on fuel prices and the one yesterday, competitors’ prices were competitive, boosting imports and fuel sales by third parties,” Celestino said. He said the company will continue to closely watch international oil prices, its local market share and its refining costs to determine adjustments to fuel pricing.
It is not clear whether Petrobras’ 10.4 percent cut in diesel prices at the refineries and 3.1 percent reduction in gasoline prices will reach the pumps in Brazil. Although the values at the refineries are defined by Petrobras, distributors and gas stations are free to set their own prices. Fuel distributors have been complaining of rising prices for biodiesel and ethanol, which are blended with diesel and gasoline, respectively.
