SAO PAULO (Reuters) – Brazilian state-run oil company Petrobras will raise gasoline prices for distributors for the first time in almost a year this week, it said on Monday, while also hiking liquefied petroleum gas (LPG) prices.
The announcement by the oil giant that it would increase gasoline prices by some 7% starting Tuesday sent its shares up as much as 1.9% in Sao Paulo trading, with investors welcoming the somewhat unexpected move.
It represents Petrobras’ first gasoline price tweak since Magda Chambriard replaced Jean Paul Prates as chief executive in May, and the first time the company hikes gasoline prices since a 16.3% increase in August 2023 amid higher global oil prices.
Petrobras in 2023 ditched a more market-based pricing policy in favor of one that gave it more flexibility to smooth out price swings.
The company’s last change to gasoline prices was in October 2023, when it reduced them by 4% on average.
Under the changes, the company said in a statement, gasoline will go up 0.20 reais ($0.0366) per liter to an average 3.01 reais/liter. Average LPG prices, meanwhile, will be hiked by 3.10 reais to 34.70 reais per 13-kg cylinder.
Andrea Angelo, a strategist at broker Warren Investimentos, said the moves could have a combined upwards impact of 18 basis points on 2024 inflation, with the hike in gasoline price accounting for 13 basis points.
Angelo now expects Brazil’s benchmark consumer price index IPCA to rise 4.28% this year, up from the 4.10% she estimated before the changes announced by Petrobras.
($1 = 5.4639 reais)
(Reporting by Marta Nogueira and Luana Maria Benedito; editing by Gabriel Araujo and Tomasz Janowski)
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