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RIO DE JANEIRO, Feb 5 - Brazil’s state-controlled oil company, Petrobras, has recently expanded to one year, from three months, the period for which it calculates the international price parity of the fuels it sells, two people familiar with the decision said.
The change, which applies to both diesel and gasoline, avoids transferring international price volatility to local gas pump prices, said the people, who declined to be named because the information is not public.
Petrobras, as the state-controlled company is known, did not immediately respond to a request for comment.
The extent to which international price swings hit consumers at the Brazilian pump has long been a sensitive issue for Petrobras, which lost about $40 billion between 2011 and 2014 for selling fuels below international parity.
In 2018 former CEO Pedro Parente quit after coming under pressure to relax a policy of adjusting prices daily at the pump in response to global fuel price increases, triggering a debilitating truckers’ strike.
The latest policy shift was made in the second half of December, the people said, amid increased threats by truckers to go on another national strike against high diesel prices.
Petrobras Chief Executive Roberto Castello Branco said last week demands by truckers were not his problem and denied there was any government interference in pricing. Brazilian President Jair Bolsonaro said on Friday he would never seek to control Petrobras fuel prices.
Petrobras’ stock, which earlier traded up 3% most of the day following Bolsonaro’s statement, trimmed gains to just over 1% after Reuters’ initial report on the pricing policy moved.
The formula through which Petrobras calculates how much it makes from selling fuels in Brazil compared to international prices is private and has been controversial in the past.
The new policy gives Petrobas more time before it has to close the books on the accounting impact from international price swings, giving it flexibility to keep its retail prices low for a longer period without registering a loss. It does not prevent the company from adjusting prices at the pump up or down anytime.
This is the first time the period used internally by Petrobras to calculate price fluctuation has been made public since 2019. (Reporting by Sabrina Valle in Rio de Janeiro Editing by Matthew Lewis and David Gregorio)