UPDATE 1-Brazil's Petrobras raises gasoline price 3 pct, diesel 5 pct

jueves 6 de noviembre de 2014 18:04 GYT
 

(Adds background and reasons for price increase)

By Jeb Blount

RIO DE JANEIRO Nov 6 (Reuters) - State-run Brazilian oil producer Petrobras raised its wholesale gasoline and diesel prices for the first time in more than 11 months on Thursday, a move that could bolster the finances of the heavily indebted company after years of refining losses.

The cost of gasoline at the refinery gate will rise 3 percent and diesel 5 percent effective midnight local time (0200 GMT) on Friday, Petroleo Brasileira SA, as Petrobras is formally known, said in a statement. The increases are before taxes and the figures reflect the average of increases across the country.

On Wednesday, less than 24 hours before the announcement, Petrobras said no date for a price rise had been set and that the size of any increase had not been decided.

Petrobras's refining division has lost more than 59 billion reais ($24 billion) since the end of 2010, in large part because the government has refused to let it raise domestic fuel prices in line with world prices. With its 13 domestic refineries unable to meet all Brazil's rising needs, it must buy fuel abroad, selling imported gasoline and diesel at home at a loss.

Refining losses have crimped profit and the company's efforts to pay for its $221 billion five-year investment plan, sending its debt soaring. Petrobras is now the most-indebted of the world's major oil companies and its $138 billion in debt is the fourth-largest of any industrial company, according to Thomson Reuters data. Of the 28 largest oil companies, it is the least profitable.

The government has justified its resistance to fuel-price increases on the grounds that they would spark inflation. Brazil's consumer prices rose 6.75 percent in October from a year earlier, a level above the government's own 6.5 percent inflation target ceiling.

The latest increases are the first since Rio de Janeiro-based Petrobras raised wholesale gasoline 4 percent and diesel 8 percent on Nov. 29, 2013.   Continuación...