Brazilian state-run oil company Petróleo Brasileiro SA said Friday it will start adjusting domestic gasoline and diesel prices on a daily basis, in a bid to introduce greater flexibility to compete with private importers.
The new plan, which goes into effect Monday, replaces a policy Petrobras introduced in October of reviewing fuel prices monthly.
Under the previous policy, price changes "were not sufficient to accompany the growing volatility in the exchange rate and futures for oil and derivatives," Petrobras said in a press release. That resulted in the company losing market share to imports.
"Petrobras has to react to the loss of market share, and we want to recover that market share," Chief Financial Officer Ivan Monteiro said.
Before October, Petrobras updated its prices only sporadically and provided little transparency regarding its decision making process. At times, it burned billions of dollars per year effectively subsidizing imported energy products.
Jorge Celestino Ramos, Petrobras' downstream director, reiterated the company's commitment to selling fuel at a profit.
Under the new policy, Petrobras' marketing team will be free to make adjustments based on factors like import prices, exchange rates and capacity utilization at its refineries. An executive group will establish benchmarks for gasoline and diesel on Monday and will have to sign off on price changes beyond a plus-or-minus 7% margin from those benchmarks.
"These practices reflect the international market more closely," Mr. Ramos said.
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(END) Dow Jones Newswires
June 30, 2017 10:16 ET (14:16 GMT)