Latin American Oil Giants Struggle With Fuel Costs, Debt, And Pipeline Explosion
Petrobras Raises Fuel Prices for Consumers
Brazilian motorists are soon likely to pay more at the pump after the country’s state-run oil company, Petrobras, raised gasoline and diesel prices on Wednesday, Reuters reported. The move comes in line with fluctuations in global markets, the company said. The firm, which is also known as Petr?leo Brasileiro, said in a statement that the average gasoline price at the refinery gate will rise to 3.24 reais ($0.58) per liter from 3.09 reais, while diesel prices will jump to 3.61 reais per liter from 3.34 reais. “These adjustments are important to ensure that the market continues to be supplied on an economic basis and without the risk of shortages by the different actors responsible for serving the different Brazilian regions: distributors, importers and other producers,” Petrobras said. The oil giant added that up until last October, it had reduced the price of gasoline and maintained the price of diesel, but after 77 days, it had decided to “make adjustments to its gasoline and diesel sales prices for distributors.” The price increases are “in balance with the market, following up and down variations” that have been affected by “external volatilities and the exchange rate,” the statement added.
Venezuela Reportedly to Resume Exports of Diluted Crude Oil
Venezuelan state oil company PDVSA will resume exports of diluted crude oil (DCO) this week for the first time in nine months, Reuters reported. PDVSA was forced to cease production of DCO following U.S. trade sanctions, given the lack of diluents that aid in the production of the export. Following a September agreement between Venezuelan President Nicol?s Maduro’s government and Iran, however, PDVSA now has access to an Iranian condensate, allowing for the alteration of DCO production and shipping strategies, Reuters reported. Given the increase in stocks of diluted crude oil, PDVSA has resumed exports to Asia, so that the DCO does not continue to take up storage space.
Venezuela Gas Pipeline Explosion Blamed on ‘Criminal Saboteurs’
Venezuelan state-run oil company PDVSA said an explosion along a gasoline pipeline was an act of “criminal sabotage,” Reuters reported Wednesday. Officials in Anzo?tegui state, in eastern Venezuela, said the blast took place late on Tuesday. There was no word on who was responsible for the explosion, or whether there were casualties. It was presumably caused by “attempts to perforate the pipeline,” state Governor Luis Jos? Marcano said in a Twitter post. Authorities said the damage would be repaired quickly.
Mexico Swaps Bonds to Lower Pemex Debt Burden
Mexican state petroleum company Pemex has slashed its debt burden by $3.2 billion, Bloomberg News reported Sunday, citing government officials. Pemex swapped soon-to-expire debt with a new bond with a maturity of 10 years as part of a refinancing plan. Efforts to get the debt-strapped firm back on its feet also include direct capital injections and tax breaks, OilPrice.com reported on Monday. The administration of President Andr?s Manuel L?pez Obrador has reduced the amount of taxes the company owes the government three times, from 64 percent to 40 percent, the report added. Pemex is buried under $113 billion in debt, the most of any state oil firm in the world, and continues to struggle to reverse more than 10 years’ worth of output declines, Bloomberg News reported. The oil producer, also known as Petr?leos Mexicanos, depends on the federal government’s willingness to continue paying bondholders, the report added. The Mexican government has been moving ahead with a comprehensive revamp of the country’s energy sector, which in large part aims to end the reforms put in place by previous pro-market administrations, and help position state companies as dominant industry players.
By Latin America Energy Advisor
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