Low gasoline and diesel prices likely to impact food slump

Low gasoline and diesel prices likely to impact food slump
Low gasoline and diesel prices likely to impact food slump

Advancing in price reduction in Brazil, Petrobras announced a 30-cent reduction in the price of diesel oil passed on to fuel distributors. The new price of a liter of diesel at Petrobras refineries went from R$5.19 to R$4.89, a drop of 30 cents.

See more: Petrobras reduces the price of diesel sold at its refineries by 5.8%.

Last month Petrobras had already reduced the price of diesel by 22 cents. According to the company, these reductions were possible due to the devaluation of the price of a barrel of oil in the international market.

In addition, the company is working continuously with the federal government to reduce the impact of fuels on Brazilians’ pockets. Regarding gasoline, Petrobras did not announce any changes.

Why are fuel prices falling in Brazil?

Prices at gas stations have dropped for several reasons. The first is the tax reduction policy implemented by the federal government and followed in partnership with state governments.

The second reason high prices drop is that they reduce demand, which lowers prices. With high fuel, consumers may decide not to take a road trip or hitchhike with friends instead of driving alone. Another important factor, mentioned earlier, is that some states have also reduced their taxes on fuel, which lowers prices.

International crude oil is the biggest factor influencing fuel prices, accounting for more than 50% of what we pay at the pump. Oil is vulnerable to any perception of softness in global economic conditions, as downturns typically lead to lower demand for oil and oil products.

The rapid decline has been one of the main drivers of the reduction of inflation, since fuel prices are a driving force in many categories, mainly in the diet of the Brazilian population. Food is cheaper to transport because of the low prices of diesel, gasoline and ethanol. This is an impact felt directly in the pocket of everyone who lives in the country.

The article is in Portuguese

Tags: gasoline diesel prices impact food slump

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