SAO PAULO: State-controlled Brazilian oil company Petroleo Brasileiro SA is considering lowering wholesale gasoline and diesel prices by year-end, which would be the first time since September 2015, O Globo newspaper said on Wednesday.
Citing sources close to management, the paper said the company may cut prices of fuels at its refineries to match those of international competitors.
In a news conference on Tuesday, Chief Executive Officer Pedro Parente said the company would not need government approval for a price adjustment, a change from the policy under impeached President Dilma Rousseff.
"The main difference is that if we want to alter the price today, we change it," Parente said.
"We evaluate market conditions. We don't have to ask anything of anyone. We can take actions that attend to the interests of the company." Petrobras derives nearly a third of its revenue from domestic fuel sales.
The lowering of gasoline prices would squeeze the margins of Brazil's ethanol sector, which competes directly with the petroleum-based fuel at the pump.
Large companies such as Raizen, Biosev and Sao Martinho have been optimizing sugar production because the sweetener offers returns superior to ethanol.
A drop in gasoline prices will make sugar even more attractive to mills.
Petrobras shares were up 0.4 percent at 13.55 reais early on Wednesday.
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