* Books close in annualized terms
* Policy does not prevent prices adjustments at the pump (Adds comments by Petrobras)
RIO DE JANEIRO, Feb 5 - Brazil’s state-controlled oil company, Petrobras, has expanded to one year from three months the period for which it calculates the international price parity of the fuels it sells, the producer confirmed in a statement on Friday after a report by Reuters.
The change, which applies to both diesel and gasoline, avoids transferring international price volatility to local gas pump prices.
This is the first time the period used internally by Petrobras to calculate price fluctuation has been made public since 2019.
Petrobras, as the state-controlled company is known, said the change occurred in the first half of 2020 and has not generated losses for the company.
Reuters previously reported that the changes that give flexibility for the company to operate temporarily below international prices occurred in December.
The frequency of when books calculate losses and gains against international prices has been undisclosed for almost two years. Until mid-2018, prices were adjusted daily.
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 that triggered a debilitating truckers’ strike.
The policy gives Petrobras 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. The company said it has registered robust operational results.
Petrobras Chief Executive Roberto Castello Branco said last week demands by truckers were not his problem. Brazilian President Jair Bolsonaro said on Friday he would never seek to control Petrobras fuel prices.
Petrobras’ stock traded up 3% following Bolsonaro’s statement but then trimmed gains to 0.7% after the initial Reuters story. Shares of fuel distribution company BR Distribuidora SA, still partially owned by Petrobras, also lost ground and closed 1.2% lower. (Reporting by Sabrina Valle in Rio de Janeiro Editing by David Gregorio and Matthew Lewis)