Fox Business/Dow Jones Newswires, 11/21/2012
Brazil’s state-controlled oil company Petroleo Brasileiro SA (PBR, PETR4.BR) is seeking a fuel price hike of up to 15% in order to finance its investment program in the coming years that will require billions of dollars, Folha de S. Paulo newspaper reported Wednesday.
The hike in fuel prices will take place from next year onward, but Petrobras is still evaluating if there should be a one-off increment in February or if the hike should be divided into two phases, with the first part in February and the other in August.
The increase in prices will hit gasoline and diesel, according to the report, which didn’t say where it got its information.
Brazil’s government-controlled prices for gasoline will not be raised even after the country’s currency hit its weakest level since 2009, Finance Minister Guido Mantega said on Tuesday.
“There will be no (price) hikes,” Mantega told reporters as he arrived at the ministry’s offices in Brasília.
Brazil’s state-run oil company Petrobras has been importing gasoline and diesel at international prices and selling the fuels at a loss on the local market, where the government controls prices.
Ricardo Geromel – Forbes, 08/18/2011
Former Brazilian President Luiz Inacio Lula da Silva getting his hands dirty with the first extraction of pre-salt oil, at the Petrobras platform RJS660/Angra dos Reis on the Tupi oil field basin - AFP PHOTO/ANTONIO SCORZA
Petrobras reported record-breaking and better-than-expected net profit of $ 6.86 billion in the second quarter of this year, an increase of 31.9% over the same period in 2010. In the same comparison, EBITDA rose by 4%, to $ 20.25 billion, and net income grew 12% to $73 billion.
The results could be even better. However, Petrobras, which is state-controlled, has kept prices of gasoline and diesel unchanged in Brazil.
Last year, Petrobras raised $70 billion, becoming world’s largest share issue in history. The national champion has a record of causing euphoria among Brazilians. Lula, Brazil’s former president once said that, “I believe in a certain period of the history of Brazil there will be direct elections for Petrobras’ president, and this person will nominate the president of the republic.” Earlier this year, Almir Barbassa, Petrobras CFO, implied that Petrobras could outstrip Exxon Mobil and Aplle to become the world’s largest company in an interview for Forbes.(See: Petrobras CFO On Becoming Bigger Than Exxon And Apple: I Buy Oil Every Day, iPads Every 2 Years).