Petrobras Resists Calls to Rescue Brazilian Airlines With Cheaper Jet Fuel

(Bloomberg) -- Brazil´s state-controlled oil giant Petrobras has no plans to lower jet fuel prices as part of a wider effort to rescue struggling Brazilian airlines.  

The Rio de Janeiro-based producer can’t just lower prices when the government tells it to, Chief Executive Officer Jean Paul Prates told Bloomberg News during a recent trip to India, reiterating his opposition to such a move. Prates added that “abnormal” airfare costs continued in 2023 even while jet fuel prices fell. 

President Luiz Inacio Lula da Silva’s administration has been discussing how to provide financial relief to airlines, and Petrobras has come under pressure to take on part of the burden. The plan took on added urgency after Gol Linhas Aereas Inteligentes SA filed for Chapter 11 bankruptcy protection on Jan. 25. Options include cutting fuel taxes and generating more competition in the distribution industry. 

“This is a sector which is always under crisis. It is not necessarily connected to jet fuel,” Prates said. “We’re not going to lower prices.”

©2024 Bloomberg L.P.