Understand the consequences of Petrobras' price policy

The newspaper Poder 360 published an article with an analysis by LEGGIO Consultoria on Petrobras' new pricing policy. Marcus D´Elia, a partner at Leggio Consultoria, highlights two points: the import limitation and the different values per customer.

One of the consequences of the state-owned company practicing values that are detached from the import parity price (PPI) is that importers will limit themselves to bringing the volume that covers the difference between domestic demand and the state-owned company's supply each month. In this way, competition will be less within the refining segment and makes Petrobras responsible for supplying any unforeseen variations in national demand.

As for the differentiation of values by customers, the specialist points out that it can lead to a greater concentration of the market in distribution. D'Elia says that Petrobras' contracts with distributors provide for "price equality at the hub", that is, the price would be the same for all customers in a given fuel sales hub. If the price is lower for a distributor that buys large volumes, there will be a concentration of these buyers, since the higher prices should discourage the action of regional distributors, who negotiate smaller volumes.

Check out the full article at the link: https://www.poder360.com.br/ energy/petrobras-dominates-market-but-importacoes-are-up-25-da-demand/