Prates: Petrobras (PETR4) has competition, all refineries in the world are competitors

In an interview with CNN, the President of Petrobras (PETR3;PETR4), Jean Paul Prates denied that Petrobras was still the only player in the fuel market in Brazil and therefore stated that he did not understand the pressure on the state-owned company to practice price linked to imports (PPI).

“Petrobras has competition, all the refineries in the world are competitors. In Brazil we have them in Amazonas (Ream) and Bahia (Mataripe),” he said in an interview on the company’s new pricing policy announced this Tuesday, the 16th. “Because if I import 1%, I can’t sell at the import price 99%,” he added.

Petrobras accounts for around 80% of the derivatives market. About 14% is owned by Acelen and another 5% is owned by other small refiners and importers, mostly diesel.

Prates said the new policy is necessary because Petrobras has lost customers to its competitors, including importers.

He reiterated that the PPI is an “abstraction,” a classification he’s used since acquiring the company. In his opinion, the PPI did not bring the predictability they require from the state-owned company and that from now on it will be easier to control the price according to normal market fluctuations.

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“It’s a limited cushion, but by managing the refineries, we’ve managed to manage it,” he explained.

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