Markets / Stocks

Petrobras ADRs Slump 14% As Brazil Offers New Fuel Subsidies

ADRs of Petrobras (PBR) were slumping 14% pre-market Tuesday after Brazil’s government began providing new fuel subsidies and tweaked the oil major’s pricing policy in an effort to end a truckers’ strike in the country.

President Michel Temer unveiled an agreement on Sunday under which domestic diesel prices would be decreased about 13% from prices at the pump and remain frozen for 60 days as a result of tax cuts and subsidies, Reuters reported.

Under the deal, the oil major will begin adjusting diesel prices on a monthly basis instead of on a daily basis, the report added.

In a securities filing Petrobras said it would be compensated by the government for any losses.

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