President Luiz Inácio Lula da Silva said on Thursday (2) that he will cancel the auction of liquefied petroleum gas (LPG), cooking gas, by Petrobras, which sold the product to distributors at prices up to 100% higher than those charged in the state-owned company’s price list. 
In an interview with TV Record Bahia , Lula also said that the bidding process was carried out against the wishes of Petrobras’ management.
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“An auction was held, I would say it was a stupid, thuggish act. People knew the government’s directive, Petrobras’ directive, that we were not going to increase LPG prices. So they held an auction against the will of Petrobras’ management,” said Lula.
“We are going to review this auction, we are going to cancel this auction, because the poor people will not, under any circumstances, pay the price of this war,” he stated.
Although Brazil is a producer, the Brazilian market is influenced by international prices, which are currently impacted by the conflict in the Middle East.
The strategy of auctions with high premiums is seen as a way to readjust the national price to the international market, without the need to announce an increase in the price list.
On its website , Petrobras provides the spot prices of its products to distributors, excluding taxes, by location and sales method. The prices for LPG have remained the same since November 2024.
President Lula is critical of the high price of cooking gas cylinders charged to the end consumer, and in response, the federal government launched the “People’s Gas” program , which replaced the old “Gas Assistance” program and aims to guarantee free gas cylinders for low-income families.
According to Lula, what makes the product more expensive is the distribution.
“When Petrobras sells a gas cylinder for R$37, it can’t reach R$160 in people’s homes. Someone is stealing. [They say:] ‘Ah, but the person is spending money [incurring costs] to deliver it.’ Okay, but that’s a huge difference between R$37 and R$140, or R$150. And now we held an auction that had a 100% premium,” Lula exclaimed.
Fuel price increase
The president again criticized the war in Iran and its effects on the international price of oil, which has been increasing the cost of fuel, especially diesel, in the Brazilian case. The country imports about 30% of what it consumes domestically.
According to Lula, the government is taking all possible measures and will adopt all necessary steps to prevent an escalation in the price of diesel, which directly impacts inflation.
In addition to the tax reduction already adopted , the expectation is that the government will publish, this week, a provisional measure (MP) that creates a subsidy for imported diesel , with a discount of R$ 1.20 per liter.
“Rest assured, the people will not pay. We are not going to raise the price of diesel, [but] there are people [gas stations] raising it unnecessarily . What is the logic of raising the price of ethanol? What is the logic of raising the price of gasoline if we don’t need it yet? It’s pure banditry by some people,” Lula stated.
The president also criticized the privatization, in 2019, of BR Distribuidora, a subsidiary of Petrobras, which, according to Lula, could now be used to curb rising prices for consumers.
“They privatized BR [Distribuidora] and we can only buy it back starting in 2029. In other words, we don’t have a distributor today. They even sold a gas company that I bought in 2004. The gas company, which we distribute, was a company for us to regulate prices,” said Lula.
Similarly, the president stated that the repurchase of the Mataripe Refinery , formerly the Landulpho Alves Refinery, in São Francisco do Conde, Bahia, which was privatized by Petrobras in 2021, is under study.
“What they did is not fair; the refinery [today] produces less than half of what it should produce. And we need the refinery producing much more because we [Brazil] produce 70% of our diesel oil, and we buy 30% of it. This imported diesel, there’s no way around it; it comes with the international market price, and you are forced to make the adjustment,” he explained.
