Petrobras informs that its Executive Board approved, yesterday, a new pricing policy for diesel and gasoline commercialized in its refineries.

The pricing policy principles are the following:

1. International price parity, which includes costs such as freight, internal transportation and port tariffs;

2. A margin that reflects the risks related to the operations such as foreign exchange rate and price volatility, demurrage and profit, besides taxes;

3. Market share;

4. Prices always above international parity.

The policy that will be implemented foresees assessments about price adjustments at least once a month. It is worth noticing that, as the price of these products will follow the trend of international prices, there might be maintenance, reduction or increase in the refinery gate prices.

The approval of a pricing policy and of the basic structure of Petrobras ‘products prices is a responsibility of the Executive Board, according to article 34 of the Company´s bylaws. As approved by the Executive Board, the evaluation regarding the needs for adjustments in the refinery will be taken by a Committee, the Executive Group of Market and Prices, composed of the Company´s CEO, the Chief Refining and Natural Gas Officer and the CFO.

To allow for greater flexibility in the commercial management of its oil products and encourage an increase in sales, Petrobras will also evaluate particular discounts in the price of diesel and gasoline in specific markets. Nevertheless, these discounts shall not result in prices below the Company´s costs.

As the Brazilian law guarantees price freedom in the oil and oil products market, the price adjustments undertook by Petrobras in the refinery gate may or may not be reflected in the final price to the consumer, which will depend on the pass through carried out by other players in the oil products chain, namely distribution companies and gas stations.

The Executive Group of Market and Prices decided, in its first meeting, to reduce diesel prices by 2.7% (Brazil average) and gasoline prices by 3.2% (Brazil average) in the refinery gate. These prices will be effective as of Saturday, October 15th.

The decision of the group considered the increasing import volumes, which have reduced Petrobras ‘market share, and the seasonality of the international oil and oil products market.

Future price adjustments will be communicated through press releases and internal client communication channels.