We have adopted a new diesel and gasoline price policy

The new policy will be based on two factors: Parity with the international market - also known as PIP, which includes costs such as chartering vessels, internal transport costs, and port charges - plus a margin to be practiced to remunerate risks inherent in the operation, e.g., volatility in the exchange rate and port stay prices, as well as profits and taxes. The executive board has decided that we will not practice prices below this international parity.

The main difference compared to what happens today is the term for the adjustments to be made relative to the international market. The new policy provides for evaluations for price revisions to be made at least once a month. It should be emphasized that since these fuels' prices will keep pace with the international market trends, the prices practiced at the refineries may be maintained, reduced or increased.

The need for adjustments to fuel prices at the refineries will be analyzed by the Markets and Prices Executive Group, comprising the company's CEO, its director of Refining and Natural Gas, and its CFO and Investor Relations Officer.

The first evaluation made by the executive group pointed to the need to reduce diesel by 2.7 percent and gasoline by 3.2 percent at the refinery. These prices will take effect for sales from midnight on Saturday, Oct. 15.

To allow for greater flexibility in the commercial management of oil products and to encourage sale increases, we will also consider granting specific discounts for diesel and gasoline on specific markets. Under no circumstances will such discounts be below the company's costs.

The executive committee's decision took into account the growing volume of imports, which reduces Petrobras' stakes, as well as the seasonality of the world oil market. The increase in foreign purchases has been noted especially in the case of diesel, in which the entry of products already accounts for 14 percent of the country's demand. In the case of gasoline, imports grew by 28 percent per month between March and September this year.

Since the Brazilian law ensures price freedom on the fuel and oil product market, the revisions made by Petrobras at the refineries may or not be reflected in the final price to the consumer. This will depend on price transfers made by other members of the oil chain, especially distributors and gas stations.

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