Petrobras Struggling With Gas Prices
May 03, 2011 2:23 AM
Petrobras, Brazil's state-run oil producer, is caught between a rock and a hard place when it comes gasoline prices. The company is resisting the temptation to raise fuel prices even as it faces the specter of having to import gasoline and sell it below market value, Bloomberg News reported.
Petrobras has a long-standing policy of not responding to short-term gyrations in oil prices by lowering gas prices. Brazil's government, which is the company's largest shareholder, also pressures the company to keep gasoline prices low so as to keep Brazil's rate of inflation in check.
Even though Petrobras imported 1.5 million barrels of gasoline last month, the company will not be add new refining capacity until 2013 when a new facility comes online, Bloomberg reported. Petrobras produces most of Brazil's consumed gasoline.
Petrobras said it is aiming to pump an average of 2.1 million barrels of oil per day this year with the hopes of increasing that production to 4 million barrels a day by 2020.
