RIO DE JANEIRO (Reuters) - Brazil’s state-controlled oil company Petroleo Brasileiro SA (PETR4.SA) has hiked gasoline and diesel prices twice for September to match price spikes in U.S. prices caused by Hurricane Harvey.
The storm roared into Texas, crippling ports along the U.S. Gulf Coast and flooding oil refineries, resulting in about 21 million barrels of gasoline and distillates in lost production as of Wednesday.
Petrobras, as the company is known, has raised gasoline prices for this month by 4.2 percent and 2.7 percent, while raising diesel costs by 0.8 percent and 4.4 percent in two announcements on Thursday and Friday.
As a result, the company, which has promised not to price below international parity, practically hit the ceiling for daily gasoline readjustments, according to a new policy set in July aimed at giving Petrobras greater pricing flexibility to recoup market share lost to competitors.
Under this policy, a meeting of the Group’s Executive Market and Prices (GEMP) must be called to evaluate new pricing changes if monthly accumulated adjustments exceed 7 percent.
However, experts said that Petrobras’ gasoline prices for refineries are still behind the international market.
U.S. fossil fuel reference prices RBc1 soared more than 13 percent on Thursday to a two-year high before the September contract expired on the same day. On Friday, the first October contract closed down 2 percent.
“By our estimates, the lag in Brazil is still 8 to 9 percent. Petrobras has room to increase prices, but, it seems to be gradually raising them now, to slowly lower them afterwards,” said Banco Pine commodities analyst, Lucas Brunetti.
Similarly, Tarcilo Rodrigues, director of the marketing agency Bioagencia, who sees a lag of 10 percent, said Petrobras may want to be cautious to pass on international spikes in prices if they seem to be short-term.
“It doesn’t make a lot of sense for (Petrobras) to hike a lot now after this extreme event, if supplies coming later will be much cheaper.”
Petrobras declined to comment on whether a meeting of GEMP, which includes Chief Executive Officer Pedro Parente was planned to evaluate prices.
Writing by Alexandra Alper; Editing by David Gregorio