Petrobras Raises Jet Fuel 18% and Natural Gas 19% as Oil Shock Hits Brazil

Overview

• Petrobras, which on Friday raised aviation kerosene by 18% (R$1 per liter), kept an option to split part of the increase into six payments starting in July.
• The company also lifted the price of the natural gas molecule sold to distributors by an average of 19.2%, which affects piped gas and GNV but not bottled LPG.
• Under long-standing formulas, jet fuel resets monthly and natural gas resets quarterly based on Brent crude, exchange rates, and the U.S. Henry Hub gas index.
• The federal government zeroed PIS/Cofins on jet fuel through May 31 and set up FNAC/BNDES credit lines to ease pressure on airlines.
• Industry groups warned of heavy fallout, with Abear citing a doubling of jet-fuel costs since late February and Abegás projecting another gas-molecule jump of up to 35% in August if benchmarks stay high.