(Adds pricing model details, comments from CFO Ivan Monteiro, changes dateline, previous SAO PAULO)
By Marta Nogueira and Alexandra Alper
RIO DE JANEIRO, June 30 (Reuters) - Brazilian state-controlled oil company Petróleo Brasileiro SA said on Friday it would review fuel prices more frequently as it seeks to regain market share it lost by keeping wholesale prices to retailers above global benchmarks.
Petrobras has been caught flat-footed by more nimble competitors that have been able to import gasoline and diesel they can sell more cheaply to gas station networks in the country.
Since 2016, the state oil company has set fuel prices at least once a month, which is not often enough to keep up with international oil price changes and volatility in Brazil’s exchange rate, the company said in a press statement on Friday.
From July 3, the Petrobras sales and marketing division will adjust diesel and gasoline prices a maximum of 7 percent from a reference point set by an executive committee. The reference price will include the cost of imports, taxes and margins.
“What the commercial area asked for was that we give them tools so that the company can charm the customer, can win him back,” Chief Financial Officer Ivan Monteiro said at a press conference on Friday.
That committee includes the company’s chief executive, Pedro Parente, as well as Monteiro and Jorge Celestino, the company’s head of refining and natural gas. In exceptional circumstances, it could approve a price change larger than seven percent.
After years of subsidizing local consumption by keeping fuel prices low despite high international fuel costs, Petrobras kept prices fairly steady to make a profit after oil prices plunged in 2014. But that led the company to lose market share, so last October it introduced a policy of following international markets more closely. Petrobras continues to dominate fuel production and retail sales in Brazil, but its higher wholesale prices have led to a sharp rise in imports of gasoline and diesel as competitors seek to undercut Petrobras at the pump. Petrobras supplied 92.2 percent of the gasoline consumed in Brazil in 2016, down from 93.3 percent in 2015. (Additional reporting by Luciano Costa and Bruno Federowski in Sao Paulo; Editing by Marianna Parraga and Chizu Nomiyama)