Boston, MA 12/13/2013 (wallstreetpr) – A lot of water has flown since Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) announced that it is looking at increasing the prices of fuels it wishes to sell by next year. The Chief executive officer of Petrobras has announced that such a rise would help the company bring the prices of domestic fuel to match the prices of international fuel prices.
CEO Foster’s demand for price correction has led to news reports of differences between her and the Brazialian finance Minister Guido Mantega, who also holds the post of the Chairman of Petrobas, though it was unconfirmed. Foster does not propose resigning from her post of CEO either.
Foster has been stressing the need for an automatic price adjustment structure for fuel prices for some time now. She has refuted arguments that the price rise for fuel and its products would have a chain-effect leading to price rise in nearly every other product and service, besides inflation.
There has been repeated claims that Petrobras prefers to adjust the prices of both diesel as well as domestic gasoline on the exchange rates rather than the automatic price adjustment system. This would be the new pricing mechanism for oil refined in Brazil as well as the quantity imported, proposed Petrobras.
This is contrary to Petrobras proposal of Automatic price review it had sought earlier this year in October.
That investor did not like the price rise nor thedilly-dally with the pricing mechanism to be adopted was well illustrated with the free-fall in prices. What began as a trickle in now in the region of 11% fall in prices.
Petrobras fire killed
Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) has some tough situations to control as well. Its refinery- Repar- was on fire causing a lot of damage. This is one of Brazil’s largest refineries, where nearly 10 % of crude oil is processed. Though, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) was quick to claim that there would be no shortfall in supply, there have been reports of refining shortfall.
Workers are alleging lack of safety measures in the refinery and have posted images of the extent of damages. Workers are expected to announce a strike asking for better safety measures in the near future.