Bloomberg News

Petrobras to Raise Gasoline Prices as Brazil Cuts Tax

June 22, 2012

Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil company, will raise gasoline and diesel prices next week, the company said today in a regulatory filing.

Petrobras, as the Rio de Janeiro-based producer is known, will increase prices of gasoline by 7.8 percent and diesel by 3.9 percent from June 25, the company said. Brazil plans to remove the so-called Cide tax on fuel to prevent a price increase for consumers.

Petrobras, which sells imported gasoline at a loss because of price controls aimed at keeping inflation in check, jumped 5.4 percent in Sao Paulo trading this week amid speculation that authorities would agree to increases. The changes announced today aim to align prices with international values on a median- to long-term basis, the company said.

Energy Minister Edison Lobao, who said last week that Brazil wouldn’t increase gasoline prices this year, told reporters in Rio on June 19 that the government is constantly reviewing them.

The government cut to zero the Cide tax on gasoline and diesel to “neutralize” the impact of price increases at Petrobras refineries, the Finance Ministry said in an e-mailed statement today.

Petrobras shares rose 1.45 percent at the close in Sao Paulo today to 19.55 reais.

To contact the reporters on this story: Helder Marinho in Sao Paulo at hmarinho@bloomberg.net; Mario Sergio Lima in Brasilia Newsroom at mlima11@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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