RIO DE JANEIRO, June 18 (Reuters) - Brazil’s state-run oil company Petrobras is again importing gasoline and selling it locally at a loss, but falling demand means it will be hard to adjust the price to be in line with international levels, a source told Reuters.
“One has to look at the domestic market and the price. It won’t work to pass on to the market something that it will not accept,” said a senior source at Petroleo Brasileiro SA, as the company is formally known, asking for anonymity because the topic is sensitive.
The company should still see a lift to its second quarter results due to lower gasoline imports, as demand falls with a weakening economy, the source said. Sale of gasoline in Brazil fell 8.5 percent in April compared to the previous year, according to Brazil’s oil regulator ANP.
Petrobras’ refining division, which is also responsible for importing gasoline to cover excess domestic demand, has weighed on the company in recent years.
With prices at the pump in Brazil kept well below international levels, Petrobras was forced to import gasoline and sell it at a loss. In 2013, for example, Petrobras’ refining division racked up losses of $8 billion.
After years of pain, Petrobras is now being helped by the same trends that are proving serious headwinds for other global oil companies, namely weakening demand and lower international oil prices.
These trends, as well as a rise in gasoline prices in Brazil, which has made ethanol a more competitive alternative for motorists, meant Petrobras imported 30,000 to 35,000 barrels of oil per day in April and May, down from 50,000 in the first quarter, according to the source.
The recent rally in international oil prices means Petrobras is again making a loss on imported gasoline, though less than in the past.
The source said that Petrobras is currently selling gasoline at between 5 and 7 percent less than it is importing it for. However, Adriano Pires, an oil consultant, said his calculations put the number closer to 13 percent.
According to the source there would likely be a slight seasonal increase in imports in the second half of the year.
“A weakening economy is never good for the country, but together with a more competitive price for ethanol and more efficient use of refineries, it is creating a positive scenario for the company,” the source said.
Writing by Stephen Eisenhammer; Editing by Bernard Orr