Oil Supply Shortage Pushes Fuel Price To N318.65 Per Litre In Brazil

Brazilian state-run oil company Petrobras on Thursday said it will raise fuel prices at the refinery gate starting Friday as global oil prices rose following Russia’s invasion of Ukraine.

The company said gasoline prices will rise 18.8 per cent to 3.86 reais ($0.7653) per liter, while diesel prices will jump 24.9% to 4.51 reais/liter.

Based on the official exchange rate is of the Central Bank of Nigeria, the $0.7653 represents N318.65 per litre

The move represents Petrobras’ first fuel price adjustments in 57 days, and comes a day after the company said it was trying to avoid passing short-term volatility on to its local prices.

Petrobras said it will also raise liquefied petroleum gas (LPG) prices by 16 per cent to 4.48 reais per kg, in the first price change for the product in 152 days.

“After oil prices were seen at consistently high levels, it became necessary for Petrobras to adjust prices so the Brazilian market continues to be supplied, without the risk of shortages,” Petrobras said in a statement.

It added that other fuel suppliers in the country had also raised their prices.

Petrobras had been facing intense pressure to abandon its current method of pegging domestic fuel prices to international rates, with President Jair Bolsonaro recently saying the policy was based on “wrong laws designed a long time ago that cannot continue.”

The conflict in Ukraine has sent global crude prices soaring, adding to double-digit annual inflation in Latin America’s largest economy ahead of an October presidential election in which Bolsonaro plans to stand for reelection.

But the company said on Thursday it is committed to “competitive prices, in balance with the market.”