Brazil’s Petrobras lowers natural gas prices

Brazilian energy giant Petrobras (PETR4.SA) will lower natural gas prices for contracts up for adjustment in August, the company said on Thursday in a nod to inflation worries in Latin America’s biggest economy.

Petrobras will discount those contracts by 14.3 percent, up from a 9.7 percent discount in May, the company said in a statement.

The company came to the decision “under its sole discretion,” the statement added.

Sources told Reuters last month that President Dilma Rousseff was quietly pushing the company to make such a move as part of a broad strategy of lowering costs for the country’s consumers.

Rising consumer prices have become a major headache for Rousseff and the central bank. The 12-month inflation rate hit 6.71 percent in June — above the government target range of 4.5 percent plus or minus 2 percentage points.

Brazilian voters have long memories of years of runaway prices past and are unlikely to forgive any politician who risks a return to that era.

Petrobras’ decision took into account the recent outlook for energy prices, the company’s statement noted.