New Petrobras chief backs gradual fuel-price increases

Fuel prices: Average increase necessary, new Petrobras chief says

EPA/HO/SCANPIX

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By News Wires

 27 February 2012 16:55 GMT

The new CEO of Brazil's state-controlled oil company Petrobras said the company needs to raise fuel prices to keep in step with higher oil prices, while maintaining the practice of buffering pump prices to shield consumers from short-term volatility.

In an interview with Brazil's Estado de Sao Paulo newspaper less than two weeks into the job, Maria das Gracas Foster emphasized the importance of increasing domestic refining capacity to reduce Brazil's exposure to price fluctuations on international oil markets, Reuters reported.

Brazil's government has held the price of gasoline for drivers largely stable for the past eight years. Petrobras benefits when oil prices fall below the relative price level the government has set, but loses when world oil prices climb above the levels on the domestic market, forcing losses on the…

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