RIO DE JANEIRO--Brazilian state-run oil firm Petroleo Brasileiro
SA said late Thursday it would raise fuel prices in the country
starting midnight Friday, following months of agitation from
investors for such a move.
The price increase signals that the government of recently
re-elected President Dilma Rousseff may ease some government
controls on the company.
Petrobras will raise gasoline prices by 3% and diesel prices by
5%, the company said in a statement. The move comes a day after the
company's board of directors recommended that prices remain
unchanged.
Brazil has subsidized the cost of fuel since 2011, and Petrobras
foots the bill for the difference between market prices and the
subsidized price, a policy that has cost the company billions of
dollars and contributed to making it the world's most heavily
indebted oil major.
Petrobras executives and investors for months have been pushing
for a rise in prices. In recent days, as a decision on the fuel
price looked less likely, Petrobras shares were battered. Shares
are down more than 30% in the past month.
The costs related to the subsidy threatened the feasibility of
the company's massive $220 billion five-year spending plan,
according to analysts, which include large investments in
deep-water oil exploration and production, and the construction of
two new refineries.
Write to Will Connors at william.connors@wsj.com
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