Brazilian state-run oil and gas company Petrobras has announced a natural gas price cut of an average of 8.1%.
The cut will come into effect on 1 May. The company announced on Monday that prices will be cut by approximately 8.1%, when compared with prices in the February to April quarter. The company claims that this comes in line with global oil prices and foreign exchange rates.
From February to April, the price of crude oil fell by approximately 8.7% while the Brazilian real strengthened by about 1.1%, according to a statement from Petrobras.
The company plans to increase the cost of gas transportation by 0.2% as of May 2023. A Petrobras statement said: “With this update, the price of natural gas sold by Petrobras to the distributors will accumulate a reduction of approximately 19% in the year”.
Earlier in the year, Petrobras chief executive Jean Paul Prates disagreed with President Lula over fuel pricing. Lula wished to see a new pricing policy for the state-run company replacing the International Parity Price (PPI), an index that prices fuel based on import cost and transport fees. Prates promised changes to the PPI to accommodate global oil prices and foreign exchange rates.
Despite the ongoing energy transition, Petrobras executives remain committed to oil and gas. Prates recently told reporters that: “We may be the last to produce oil in the world”. He went on: “We came out very late to this game as a big producer, but we have to keep the ball rolling”.
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Brazil is the eighth largest global oil producer, with Petrobras accounting for 73% of the country’s production. The oil and gas market typically accounts for around 10% of the country’s GDP. Brazil’s output is set to reach a record 3.4 million barrels a day this year, and will keep growing until 2030.