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UPDATE 1-Brazil's Petrobras raises diesel prices by an average 6.1 pct
January 5, 2017 / 10:45 PM / 9 months ago

UPDATE 1-Brazil's Petrobras raises diesel prices by an average 6.1 pct

(Adds details, context)

SAO PAULO, Jan 5 (Reuters) - Brazilian state-controlled oil company Petróleo Brasileiro SA increased diesel prices at refineries by 6.1 percent on average with immediate effect, citing higher oil prices and a stronger real currency.

According to a Thursday statement, the decision also stemmed from stronger seasonal demand for diesel as winter peaked in the northern hemisphere.

For years, Petrobras kept fuel prices artificially low in order to avoid pressuring inflation, absorbing sharp losses whenever prices of crude rose in global markets.

Under Chief Executive Officer Pedro Parente, Petrobras adopted a more flexible pricing policy, taking into consideration the exchange rate, the company’s market share and other factors, to set wholesale fuel prices at its refineries.

It will continue revising fuel prices at least once every 30 days, Petrobras said.

If fuel distributors, gas stations and other intermediaries choose to fully transfer the price increase to consumers, that would translate into a 3.8 percent price hike at pumps, according to the statement. (Reporting by Bruno Federowski; Editing by Chris Reese and Lisa Shumaker)

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