Petrobras warns new management may ditch price policy

Petrobras warns new management may ditch price policy

Rio de Janeiro, 31 March (Argus) — Political meddling in Petrobras' fuel pricing policy is one of the many risks that could adversely affect the Brazilian state-controlled company's performance, according to a recent company filing with US Securities and Exchange Commission.

"A new management team or board of directors may propose changes to our pricing policies, including a decision that such policies may not seek for alignment with international price parity," Petrobras said in the filing. In flagging the risk, the company referred to repeated statements from President Jair Bolsonaro urging a modification of the company's market-based pricing.

The warning comes just days after Bolsonaro decided to replace outgoing chief executive Joaquim Silva e Luna with seasoned technocrat Adriano Pires — the second chief executive change in a little over a year — and just weeks before a shareholder meeting will put Rodolfo Landim, a controversial Rio businessman and oil industry veteran, in the chairman's seat.

The changes, just months before presidential elections in October, have raised concerns that Bolsonaro could meddle in the firm's decision making to tame spiraling inflation, which is weighing on his re-election bid.

Since 2016, Petrobras' market-based fuel pricing policy has been guided by the import price parity principle