Petrobras starts regional fuel price postings

Brazil's state-controlled Petrobras started publishing daily wholesale gasoline and diesel prices at each of the company's 37 points of sale, the latest step aimed at heading off a strike by independent truck drivers.

Petrobras was already disclosing daily average price changes for gasoline and diesel since March 2018. The new approach offers more regional granularity.

Uberaba in the southeastern state of Minas Gerais has the highest diesel price at R2.3564/l and the highest ultra-low sulfur diesel price at R2.4011/l. Center-west Brasilia the highest gasoline price at R2.1059/l. São Luis in the northeastern state of Maranhao has the lowest gasoline price at 1.8084/l.

Itacoatiara in the northern state of Amazonas has the lowest diesel price at 2.1206/l and Ipojuca in the northeastern state of Pernambuco the lowest ultra-low sulfur diesel price at R2.1422/l.

Petrobras says its cost to bring fuel to market represents around 54pc of pump prices. The decision to disclose all refinery gate prices puts more focus on state and federal fuel taxes and distributors' margins.

The new price disclosures for gasoline, diesel and ultra-low sulfur diesel are a first, and represent the company's commitment to transparency and repudiation of monopolistic practices, the company said yesterday in a securities filing.

Truck drivers have been threatening another strike following successive diesel price increases that took effect after a diesel price subsidy expired in December. The R0.30/l ($0.08/l) subsidy was introduced to end a May 2018 truckers' strike that disrupted fuel and food supplies nationwide.

Petrobras has already adopted a diesel price hedge and amended its pricing policy to allow for 15-day price freezes. But a 4.8pc average diesel price increase on 18 April—the first price change since 22 March—has stirred talk of a new work action before the end of the month.

The government has responded to trucker drivers' demands with an incentive package that includes a R2bn budget for highway maintenance and subsidized loans for tires.

Economy minister Paulo Guedes has also left open the possibility of lowering federal fuel taxes to ease tensions.