Brazil's Petrobras to reimburse winners of LPG auction criticized by Lula

Petrobras will reimburse fuel distributors that won a March LPG auction by paying the difference between their bids and import prices at the time. The move compensates distributors for bid-import price gaps and transfers an unspecified cash cost to the state-run company, easing distributor margins but unlikely to materially move markets without disclosure of the payment magnitude.

Analysis

Petrobras will reimburse fuel distributors that won a March LPG auction by paying the difference between their bids and import prices at the time. The move compensates distributors for bid-import price gaps and transfers an unspecified cash cost to the state-run company, easing distributor margins but unlikely to materially move markets without disclosure of the payment magnitude.