Petrobras lowers diesel prices for the first time in over a year, impacting fuel costs in Brazil. The state-run oil company announced a 4.6% cut in diesel prices, reducing the price per liter to 3.55 reais ($0.6197), effective April 1. Gasoline prices remain unchanged, while jet fuel will see a 7.9% average decrease starting the same day. This marks the first diesel price adjustment by Petrobras since early February, when it hiked prices nearly 7%. The move follows currency appreciation and lower global oil prices, as Petrobras aims to protect fuel prices from international volatility while maintaining profitability.

The logo of state-run oil company Petrobras is seen in front of the Brazilian national flag at the Alberto Pasqualini Refinery in Canoas, Rio Grande do Sul state, Brazil, October 25, 2021.

For leftist President Luiz Inacio Lula da Silva, whose approval ratings have sharply declined due to high inflation, this price cut could be positive news. Petrobras has implemented a pricing strategy to safeguard fuel prices against global fluctuations, a move that benefits the company but may have broader economic implications. The decision reflects the impact of Brazil's currency, the real, which has Appreciated nearly 8% against the U.S. dollar this year. Most diesel prices have remained above import parity, with Monday's rate at 2% above it, according to Abicom, a fuel imports association.

This pricing adjustment is part of Petrobras' broader strategy to navigate economic challenges, including the effects of inflation and geopolitical factors. The company's actions highlight the industry's sensitivity to market dynamics and its attempt to mitigate risks in a challenging environment. As global oil prices remain below last month's levels, Petrobras seeks to stabilize fuel costs for distributors. The move underscores the company's adaptability in the face of economic uncertainties, while also offering a potential relief for drivers and businesses reliant on diesel.