Petrobras (
PBR -7%) plunges after
canceling a diesel price increase at the behest of Brazil's Pres. Bolsonaro, spooking investors wary of political interference in the company's affairs.
PBR announced yesterday that it would raise diesel prices by 5.7% to the highest level since October, then disclosed this morning it was backing off; the abrupt reversal is a worrisome reminder that the state-run oil company sold fuel at a loss for years under pressure from previous governments.
Brazil Vice Pres. Mourao says Bolsonaro had pressured PBR to cancel the price hike but he has “absolute certainty” that it is a one-time action.