Petrobras says fuel policy does not adjust prices automatically


SAO PAULO, Dec 4 (Reuters) - Brazil's state-run oil companyPetroleo Brasileiro SA said on Wednesday thefuel-pricing policy approved by its board last week would notautomatically adjust prices in relation to international levels.

Petrobras, as the company is known, on Nov. 30 raisedgasoline prices by 4 percent and diesel by 8 percent, less thanthe market expected.

At the time it did not give details on a formula foradjusting prices that investors had hoped would generate morecash to finance the company's ambitious expansion plans.

"In regards to the application of the adjustments, thesewill not be automatic," the company said on Wednesday in afiling that responded to questions on the policy from Brazil'ssecurities regulator.

"The methodology establishes adjustment bands, giving theexecutive board discretionary power over the dynamics ofdomestic and international markets."

President Dilma Rousseff's government did not agree to anautomatic price adjustment sought by some board members.

Brazil keeps fuel prices low to control inflation, causingPetrobras to lose more than 30 billion reais ($12.6 billion) inits refining division since 2012 as it imported and sold fuel ata loss.

The government has a majority of voting shares in Petrobras,giving it control over major decisions. Private investors have amajority of non-voting shares.

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