Petrobras Implements Price Caps to Reduce August Natural Gas Increase from 22% to 6%

Petrobras approved a volatility protection mechanism for natural gas pricing based on establishing maximum and minimum Brent crude bands, according to company statements released June 30. The temporary measure will reduce the molecule price adjustment for distributors in August from a potential 22% to 6%, following a 19% increase implemented in May during the Middle East conflict. Customers must sign contract amendments to adopt the new pricing structure, which includes a temporary floor that extends beyond the duration of the price ceiling.

The state oil company has been negotiating with state-owned gas distributors since May to mitigate impacts from Middle East tensions. Petrobras is simultaneously opening direct channels with industrial clients in the free gas market, interpreted as a commercial repositioning against competitors. The pricing mechanism links gas prices to petroleum benchmarks while capping maximum exposure to Brent fluctuations.

Brazil’s government announced the gradual elimination of fuel subsidies starting July 1, beginning with removal of the R$0.36 per liter diesel subsidy implemented in June. Finance Minister Dario Durigan confirmed Petrobras will reduce diesel prices by the equivalent amount, resulting in no net price change at the distributor level. An additional R$1.12 per liter diesel subsidy remains in force temporarily, while gasoline subsidies of R$0.44 per liter face reduction in coming days.

The subsidy rollback follows Brent crude falling 1.3% to $72.95 per barrel on June 30, approaching pre-war levels after a temporary US-Iran peace agreement. The government’s provisional measure imposing 12% export taxes on petroleum expires in early July, with economic officials considering renewal despite legal challenges. A legislative proposal to use petroleum revenue surpluses for fuel price stabilization has lost relevance as market conditions normalize.

Petrobras approved its 2026-2030 business plan in November 2025, allocating $109 billion in total investments including $91 billion for projects under implementation and $18 billion for evaluation-stage opportunities. The plan introduces a base implementation portfolio of $81 billion with a conditional $10 billion allocation subject to quarterly cash flow reviews, reflecting financial discipline amid lower petroleum price scenarios.