Petrobras Chairman Nelson Carvalho has opposed a management proposal to reduce the price of gasoline in a bid to boost sales, said a person familiar with the discussions.
Jorge Celestino, the head of refining, proposed a price cut at a time Petrobras is losing market share, said the person, who asked to remain anonymous because the discussions aren’t public.
CEO Aldemir Bendine wrote a letter to the board saying no decision has been made and the company will continue to debate which is the most favorable price level for the company. Globo newspaper previously reported the fuel price discussions.
A price cut at the world’s most indebted oil producer would come as President Dilma Rousseff is facing an impeachment battle in Congress. In his letter to the board, Bendine rejected any speculation that the price debate was driven by political considerations, said the person. While the company can reduce prices without board approval, historically the board has weighed in on any adjustments. The stock fell 9.3 percent to 7.58 reais at close in Sao Paulo on Monday.
While the company is always assessing the competitiveness of its commercial policies, there are no plans in place to cut fuel prices, Petrobras said in a regulatory filing.
Carvalho’s position marks a shift at the oil producer’s board, which consistently opposed price increases when it was led by former finance minister Guido Mantega during the commodities boom.
Petrobras chairman, board split on gasoline price cuts