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LatinNews Daily Report - 19 June 2012
In Brief - Brazil
ECONOMY | Graças Foster defends increase in domestic fuel prices. In a press conference in Rio on 15 June, Maria das Graças Foster, the president of the state oil giant Petrobras, defended the case for a rise in domestic fuel prices, saying that the recent decline in international crude prices had been offset by the recent depreciation of the Real against the US dollar, meaning that import costs for Petrobras have not really changed. Petrobras has been forced to swallow higher import costs by the federal government, which has prevented the oil company from passing on price increases to Brazilian consumers. Petrobras last week revised down its production targets in its latest five year (2012-2016) investment plan, but increased its investment spending by 5.3% to US$236.5bn. The plan was the first under Graças Foster and some oil analysts said it was a much-needed reality check. Falling crude prices will make the company’s ambitious and hugely expensive offshore development plans more difficult to realise, even as the government is banking heavily on the offshore sector to propel Brazil’s economic growth in coming decades.
