With Petrobras’ shares melting on the stock exchange, CEO Pedro Parente held a call with investors to calm nerves and explain the company’s move to lower diesel prices by 10%.
Parente opened the call by saying the price cut was a one-off move, an “exceptional measure to show goodwill to the public” in an effort to address the underlying fear in the markets that the Brazilian government, Petrobras’ largest shareholder, was using the company to stem a crisis created by a multi-day truckers’ strike that is bringing the country to a halt.
“The company was being blamed and we had to do our part,” Parente said, “but we are not part of the negotiations with strikers and won’t do any further cuts in prices. This was an exceptional move in a time of crisis.”
Petrobras has said the impact on revenue will be around BRL350m ($96.1m), but “that might change,” Parente added, “depending on exchange rates and oil price fluctuations.” The price cut will last 15 days and then Petrobras will gradually return to its normal pricing policy.
“This is a one-time event and our pricing policy has not changed,” Parente repeated.
Striking truck drivers have blocked highways in São Paulo state, Brazil’s largest industrial hub, and several areas are already feeling the effects of the lack of deliveries. According to Parente, about 90% of Rio de Janeiro gas stations were already without fuel as deliveries came to a halt.
Shares in Petrobras sank 14.6% to close at BRL23.20 on Thursday.
Petrobras said in a statement that any long-term solution to the crisis needs to include lower federal and state taxes that have a large impact on the price at the pump for consumers.
Parente said he hopes the sale of two refineries announced earlier this month will also be part of the solution, with the private sector taking over some of Brazil’s refining capacity. Parente said he thinks an agreement can be signed this year and the sale closed in 2019. LF