Shares of Petroleo Brasileiro posted their biggest one-day loss in nearly 1-1/2 years on Monday after Brazil's state-run oil company announced a smaller-than-expected increase in fuel prices and withheld details of a new pricing policy.
The company, known as Petrobras, said on Friday it would raise the wholesale price of gasoline 4 percent and diesel 8 percent to cut losses and bring domestic fuel costs closer to international levels.
Petrobras imports fuel to meet domestic demand and sells it at below-market prices as part of government efforts to control inflation, leading to hefty losses in its refining division.
The increase, Petrobras said, is part of a new fuel-pricing policy, approved on Friday by the Petrobras board, that seeks "convergence" with world fuel prices. The company did not offer details on how the policy would work or how changes in world benchmark fuel prices would trigger changes in local prices.
Investors disappointed by the news sent Petrobras' preferred shares down as much as 7.2 percent to 17.75 reais, their lowest level in six weeks. Common shares fell as much as 9.2 percent.