(Adds detail through on structure of hedging program, context)
SAO PAULO, Dec 28 (Reuters) - Brazil's Petroleo Brasileiro SA has approved a hedging program for diesel prices in a bid to boost pricing flexibility, the state-run oil firm said in a filing on Friday.
While Petrobras, as the firm is known, did not detail how its diesel hedging program would be structured, it said the move was similar to a measure taken in September, when the company introduced a hedging program for gasoline.
Under the new measures, which will take effect after a government diesel subsidy program expires at the end of December, Petrobras will be able to keep diesel prices stable for "short periods" of up to seven days, while varying the frequency of price adjustments during times of high volatility.
In a separate statement, Petrobras said using the hedging instrument would be neither "automatic nor immediate," and was geared toward short-term events, such as "hurricanes in the Gulf of Mexico".
The company said it was still committed to allowing diesel prices to fluctuate in line with international markets and the exchange rate.
Petrobras' separate gasoline hedging program allows the company to keep domestic gasoline prices stable for up to 15 days at a time.
The roll out of the gasoline program, which came after a truckers' strike over rising diesel prices paralyzed Brazil, was seen as neutral to slightly negative by the market, amid a lack of clarity about the structure of the hedge positions and general fears of interference in market-based pricing policies.
In September, Petrobras Chief Financial Officer Rafael Grisolia told Reuters the company was considering adopting a diesel hedge program. He said the cost of the fuel hedge was marginal and that banks that typically executed the fuel hedge included Goldman Sachs, Bank of America Corp, Banco do Brasil SA and Citibank.
(Reporting by Gram Slattery; Editing by Susan Fenton and David Evans)