Petrobras Limits Extra Diesel Quotas, Freezing Market Amid Unadjusted Prices

Petrobras is reportedly declining requests from distributors for additional diesel volumes, as it maintains its refinery prices at a record discount compared to the international market, thereby stalling negotiations in the Brazilian sector. This information comes from four sources familiar with the matter. According to calculations by the Brazilian Association of Fuel Importers (Abicom), Petrobras's diesel prices sold to distributors were R$2.74 per liter below import parity at the market opening this Monday. This disparity occurred after an escalation of conflicts in the Middle East caused oil prices to surge. Brent crude, the international benchmark, closed up 6.76% at US$98.96 per barrel. An anonymous company source stated, "All distributors are requesting additional fuel quotas to stock up at low prices. Petrobras is only providing the contractual quota and is not currently offering additional quotas." The source elaborated, "Now (with high prices), we cannot give additional quotas for distributors to buy our cheap diesel, fill up on volume, and then sell it to stock up and make money off Petrobras." Petrobras's failure to adjust prices so far has not only hindered domestic transactions but also generated market uncertainties regarding future supply. This is particularly critical given that approximately 25% of Brazil's diesel consumption is imported, as noted by three of the consulted sources.