RIO DE JANEIRO, May 28 (Reuters) - Brazil's state-run oil company Petroleo Brasileiro SA plans to end discounts for the country's gas distributors by the end of this year, Brazil's piped natural gas distributors association Abigás said on Thursday.
The discounts, part of fuel subsidies forced on Petrobras, as the company is known, by a Brazilian government trying to keep inflation in check, should ease the company's debt and cash problems.
Below-market fuel-pricing has helped Petrobras rack up the world's third-largest debt among non-financial companies and the largest debt of any oil company.
Petrobras did not immediately respond to a request for comment.
It will also likely add additional pressure on Brazilian consumers already struggling with a stagnant economy and an easing job market. The 12-month inflation rate of 8.17 percent has held stubbornly above the government's target range of 4.5 percent plus or minus two percentage points.
It will also likely raise costs for businesses, electricity and for many drivers, especially taxi drivers who are increasingly using Brazil's growing supply of natural gas as a fuel source.
Abigás said that it believes the discounts can be removed gradually during quarterly price adjustments, though it also said Petrobras has told it the discounts could be lifted at any time. (Reporting by Marta Nogueira; Writing by Jeb Blount; Editing by Lisa Shumaker)