Middle East

Court suspends price increase for Petrobras Natgas

December 29, 2021

© Celso Pupo / Adobe Stock

Courts in four Brazilian states have suspended a 50% increase in natural gas prices planned by state-owned oil company Petrobras. This could initiate a fierce court battle between the company, the distributors buying fuel, and various political authorities.

In a note on Tuesday night, the company (formally Petroleo Brasileiro SA) said courts in four states issued injunctions at the request of natural gas distributors, and the fifth injunction was dismissed.

The company did not identify the state in which the injunction was granted, but the Rio de Janeiro state legislature said on Twitter that a judge there had stopped raising prices. The national newspaper OGlobo has identified the other three states as Sergipe, Ceara and Aragoas, all in the northeastern part of the country.

This decision is the latest headache for Petrobras, who promised to bring fuel prices almost in line with international levels. That policy helped the company make bumper profits this year, but upset many consumers and politicians at all levels of government.

The injunction applies to liquefied petroleum gas, natural gas for vehicles, and gases commonly used for industrial purposes, but not to other fuels such as gasoline and diesel. Rio’s injunction (probably the most economically relevant) will continue until Brazilian antitrust regulator Cade announces his opinion on the issue.

Petrobras said in the memo that he would sue an injunction.

According to the company, almost half of the natural gas sold in 2022 will be sold under long-term contracts, and the conditions are respected. However, some clients choose short-term contracts. Petrobras imports natural gas from Bolivia, and the company added that prices rose “almost 500%” in 2021.

(Reuters-Report by Ricardo Brito and Gram Slattery, edited by Brad Haynes, Dan Grebler, Richard Pullin)

https://www.oedigital.com/news/493177-courts-suspend-petrobras-natgas-price-hikes Court suspends price increase for Petrobras Natgas

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