(Petrobras, 7.Feb.2021) — Petrobras is clarifying a piece of news published on Friday afternoon, 5 February 2021, based on distorted statements released by the press.
The maintenance of the periodicity for the measurement of the adherence between realization prices and international prices, adopted since June 2020 and confirmed in January 2021, was mistakenly communicated by the press as a change in the company’s commercial policy.
As a practice previously adopted and maintained since 2019, Petrobras follows the pricing of fuels in line with international prices converted into Reais by the Real/US dollar exchange rate. This system has been widely and repeatedly disclosed to the market over time.
In June and August 2019, we publicly announced that price adjustments would no longer follow a pre-defined periodicity, and this remains unchanged.
Although Petrobras is practically the only oil by-products producer in Brazil, with 98% of the refining capacity, it faces competition from importers whose market shares varies from 20 to 30% of the domestic market, depending on the product.
Fuels are global commodities, such as soybeans and iron ore, whose prices are typically volatile, as well as exchange rates.
In view of the significant increase in the volatility of these variables, the company decided in June 2020 to change from quarterly to annual the period for measuring the adherence between realization prices and international prices. Such change should not be mistaken, in any way, for a change in commercial policy, the setting of periodicity for readjustments or in performance targets.
Likewise, the continuous monitoring of the markets by our team remains unchanged, which includes, among other procedures, the daily computation and analysis of the behavior of our prices in relation to international prices and the planning of actions to correct deviations.
This business routine, unlike strategic goals, policies and results, is not a subject that deserves public disclosure.
As expected, the change in the periodicity for the measurement of the adherence between realization prices and international prices did not result in losses, having been achieved the objective of maintaining import prices parity, in the same way that occurred in 2019.
Even in an extremely challenging period for the global oil industry, financial results for the first nine months of 2020 showed strong cash flow generation and debt reduction, contradicting claims of alleged losses from our commercial policy.
In January 2021, Petrobras kept unchanged the periodicity adopted from June 2020 onwards for the measurement of the adherence of the alignment between realization prices and international prices, without any further changes.
The volatility of fuel prices and exchange rates, whether upward or downward, is a permanent phenomenon, which may increase or decrease in the face of unanticipated specific events.
The simple modification of the period for assessing the adherence between realization prices and international prices brought about eight months ago does not constitute a rupture of our unswerving commitment to align our prices in Brazil to international prices and the consequent generation of value for shareholders.
Petrobras reaffirms the statements made by CEO Roberto Castello Branco, at an event on the morning of last Friday, 5 February 2021, in Brasília, of independence from external interferences in determining its prices.
Petrobras remains strongly committed to value generation, reliability in the supply of quality fuels for its customers, respect for people, the environment and the safety of its operations.