Brazil's Petrobras CEO denies claims of 'predatory' fuel pricing policy

SAO PAULO: Roberto Castello Branco, chief executive of Brazil's state-run oil company Petroleo Brasileiro SA, has dismissed accusations from private fuel importers that the firm is enforcing a price policy that does not reflect market dynamics.

Branco said in the Wednesday edition of daily Valor Econômico that the claims amount to a personal "professional offense" against him and the government's economic policymakers.

"As graduated economists ... we learned over 40 years ago that price controls are part of a museum of ineffective weapons to fight inflation," Branco was quoted as saying in Valor.

His remarks came as Abicom, a Brazilian association of private fuel importers, filed a complaint last week with antitrust watchdog against the pricing policy the state-run firm.

Petrobras, as the oil company is better known, confirmed Branco's remarks.

According to the Petrobras executive, "the best scenario" for the fuel importers is one where Petrobras sets prices up high above international parity.

"This will make viable those who are more inefficient," Branco told Valor.

Abicom President Sergio Araujo told Reuters costs and international parity prices may vary. But he denied efficiency is at the heart of the matter.

"For a commodity, what the economy teaches us is that one cannot mix up the cost of a product and the cost of opportunity," he said. "It is the market that dictates the price, not costs."