Petrobras joins subsidy program and reduces diesel price.

RIO DE JANEIRO (Reuters) - Petrobras' board of directors approved participation in the first phase of the economic subsidy program for the sale of diesel oil and reduced the price of the fuel again at refineries starting this Friday, the state-owned oil company informed the market in a statement.

In a meeting held the day before, the company decided to reduce the average selling price of Petrobras at refineries and terminals by 0,07 reais per liter, for cash purchases and excluding taxes, bringing it to 2,0316 reais per liter starting this Friday, in addition to the reduction previously implemented on May 24th.

"This price difference, in the period between June 1st and June 7th, will be reimbursed in cash by the Federal Government, through the National Agency of Petroleum, Natural Gas and Biofuels (ANP), within the scope of the program, in accordance with the regulations in force," the state-owned company informed.

On May 24, the company reduced the price of diesel at refineries by 10 percent, in an "exceptional" decision due to the truckers' protests. At the time, the reduction was 0,2335 reais per liter.

According to the state-owned oil company, participation in the first phase of the program does not bind the company to the second phase, the decision of which will be submitted to the evaluation of the competent authorities after the publication of the regulations.

"In addition to the reductions of 0,23 reais and 0,07 reais implemented by Petrobras, the average sales price will also be affected by the reduction in the tax burden of contributions to PIS, COFINS and CIDE-Combustíveis, of 0,16 reais per liter, regulated by Decree No. 9.391, of May 30, 2018, since the taxation of diesel is concentrated on the producer or importer," said Petrobras.