Petrobras Raises Gasoline Prices 18.68% as R$0.44 Subsidy Caps Distributor Hit
Updated
Updated · Valor International · May 29
Petrobras Raises Gasoline Prices 18.68% as R$0.44 Subsidy Caps Distributor Hit
5 articles · Updated · Valor International · May 29
Petrobras will raise refinery gasoline prices by R$0.48 a liter from Friday, but distributors will pay only R$0.04 more because the government will cover R$0.44 under Brazil’s new fuel-subsidy program.
The increase is Petrobras’s first gasoline hike since July 2024 and narrows, but does not close, its gap with international prices: StoneX says the company still sells gasoline 35.2% below parity, or about R$0.90 a liter.
Analysts are split on the effect at the pump. Former ANP chief David Zylbersztajn expects only a minimal pass-through—about 0.6% against last week’s average retail price of R$6.62 a liter—while fuel retailers say other market forces blur the subsidy’s impact.
The subsidy, created by a May 13 presidential decree after Middle East tensions lifted fuel risks, caps refinery and importer prices at R$0.89 a liter above the subsidized benchmark; further pressure could return if U.S.-Iran talks fail to ease Hormuz concerns.
Is Brazil's fuel subsidy a smart shield for consumers or a fiscal time bomb for its state oil company?
Will Brazil's policy to shield drivers starve its vital agricultural sector of essential diesel and fertilizer imports?