08/23/2023 – 10:04 am
More than six months of the third government of President Luiz Inácio Lula da Silva (PT) have passed and Petrobras has undergone several changes from the parity of international prices to the distribution of profits and dividends of the state-owned company.
Always a subject of debate during the election period, the company underwent major management changes under the command of Jean Paul Prates (PT). The biggest one was the end of the Import Price Parity, which meant that the oil price was controlled by the foreign market. This benefited the company’s coffers and the majority shareholders, but left the fuel more expensive for the internal market.
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“This new form of pricing reduces the volatility of fuel prices domestically, even though no one knows what the formula for this calculation is. There are dampening factors in relation to international prices and this greater stability in prices is very important”, explained economist and director of the Institute of Functional Finance for Development (IFFD), David Deccache.
Asset sales have been suspended
The company underwent a process of privatization and asset sales, which began with former President Dilma Rousseff (PT) and was strengthened with the Michel Temer (MDB) and Jair Bolsonaro (PL) governments.
Between 2015 and the beginning of 2022, the state-owned company sold BRL 243.7 billion in assets such as BR Distribuidora, gas hubs, gas pipelines and exploration fields.
Lula’s campaign promise, the company stated that it will not make any more sales, but will keep those that are in the contract signing and closing phase.
“There is a lot of fallacy about a state-owned company, which is a job hanger, which serves for corruption, but the largest companies in the oil sector in the world are state-owned, the only exception being the United States. In addition, Petrobras is strategic when it comes to economic policy”, explained the economist at the Federal Council of Economics (Confecon), Fernando de Aquino.
Pricing policy affects inflation
One of the direct impacts of the change in Petrobras’ pricing policy is inflation. As the price of fuel affects the entire production chain, such as freight, a pricing policy that prioritizes the domestic market affects the price of several products.
“The price of fuel spreads to the economy as a whole, because they are important components of the cost of production and families. If you are adjusting domestic prices based on international prices, we make the domestic economic variables extremely uncertain”, explained Deccache.
Changes were expected by the market
On the other hand, with the lower prices practiced after the end of international price parity, the company announced that the percentage of remuneration to shareholders dropped from 60% to 45% of free cash flow. According to João Abdouni, an analyst at Levante Corp, the changes were already expected by the market right at the beginning of the mandate.
“The company now has, as the current government likes to say, a greater focus on social issues. Thus, with the price of fuel lower than that practiced in previous years and with less cash flow to distribute in dividends, therefore, the yield on dividends should fall. In general, so far the changes have already been priced in and, to be honest, so far they have not been that big”, he concluded.
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