Gas and Diesel Are More Expensive in Brazil Than Abroad

12/02/2014 - 08h38

The price of gas is between 20% and 24% more expensive in Brazil than abroad.

With diesel, the difference is about 15%. The calculation compares the price in the country and in the Gulf of Mexico, the main international reference.

Brazilians are paying more than foreigners for fuels because oil collapsed in the international market, but the fall was not passed in the country.

The government went in the opposite direction and, after the reelection of President Dilma Rousseff, readjusted gas by 3% and diesel by 5%.

The objective of the adjustment is to strengthen the battered finances of Petrobras.

From 2010 to October 2014, the state-run company subsidized the Brazilian consumer to sell gas at a cheaper price than abroad.

The government resisted readjusting gas to not raise inflation further. At the peak, Petrobras's unfavorable difference reached 30%.

According to the CBIE (Brazilian Center for Infrastructure), Petrobras accumulated losses of US$ 20 billion (R$ 51.4 billion) during the period because of the cost of opportunity (how much could have been earned if sold in another market).

Now it is the Brazilian consumers who are subsidizing Petrobras. With the current price difference, the company's monthly income is US$ 236 million (R$ 607 million) in gas and US$ 390 million (R$ 1.059 billion) in diesel.

It should be emphasized, however, that not everything goes to the company, as the cost of shipping raises the cost of the Brazilian product by around 10%. When contacted, Petrobras did not want to comment.

The oil price drop also does not favor Petrobras investments. Analysts already doubt what is the level of prices that would allow high investments in the pre-salt.

In the last 30 days, the price of Brent crude, a benchmark for the market, fell 15.7% to US$ 72.05 per barrel. A year ago, a barrel was quoted at US$ 106.40.

The fall was accentuated last wee, when Opep, cartel of oil-producing countries, said it would not reduce production.

On Monday (1), the day was to recover some of the losses and prices rose 3.4%.

The collapse of the price is due mainly to the reduction of consumption in the US with the increased use of shale gas.

Translated by JILL LANGLOIS

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	Apu Gomes/Folhapress
	The price of gas is between 20% and 24% more expensive in Brazil than abroad