Ministry: Fuel prices won't fall until oil prices stabilize

Fuel prices in Brazil will not fall until international oil prices stop rising as a result of the political troubles in Nigeria, a spokesperson for the mines and energy ministry told BNamericas. International oil prices rose sharply this week as a general strike started in Nigeria to protest a 50% rise in domestic fuel prices. Markets fear the strike could disrupt Nigeria's crude exports of some two million barrels a day. The decision to freeze Brazilian fuel prices for the time being was taken Tuesday evening following a meeting between mines and energy minister Dilma Rousseff, finance minister Antonio Palocci and Jose Eduardo Dutra, president of federal energy company Petrobras. The government is keen to see fuel prices fall, as indicated by Rousseff in recent days. However, today's reports in local newspapers have exaggerated the possibility of cuts in the short term, the spokeswoman said. Brazilian newspapers have speculated that gasoline prices could fall between 5-10%. Meanwhile, the battle to cut the price of liquefied petroleum gas (LPG) continues, with a government official this week saying the price of a 13kg bottle could fall by 10 reais (today US$3.33) in the medium term. The government is preparing a number of new regulations for the commercialization and resale segments of the LPG market, the finance ministry's economic management secretary José Tavares de Araujo said, quoted by O Estado de Sao Paulo. The government plans to allow Petrobras to enter the LPG segment as well as lower barriers for new distributors to enter the market to drive competition, he said. LPG distributors currently charge margins equivalent to about 38.5% of the final price.