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Petrobras says fuel policy does not adjust prices automatically

SAO PAULO, Dec 4 (Reuters) - Brazil's state-run oil company Petroleo Brasileiro SA said on Wednesday the fuel-pricing policy approved by its board last week would not automatically adjust prices in relation to international levels.

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

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

"In regards to the application of the adjustments, these will not be automatic," the company said on Wednesday in a filing that responded to questions on the policy from Brazil's securities regulator.

"The methodology establishes adjustment bands, giving the executive board discretionary power over the dynamics of domestic and international markets."

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

Brazil keeps fuel prices low to control inflation, causing Petrobras to lose more than 30 billion reais ($12.6 billion) in its refining division since 2012 as it imported and sold fuel at a loss.

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