Petrobras Hikes Jet Fuel Prices by 11.8% Amid Middle East Tensions

Brazil’s state-run oil giant, Petrobras, raised the average price of aviation kerosene (QAV) sold to distributors by 11.76% on October 1, 2026. The refinery-gate adjustment lifts the average price per liter from R$ 5.585 to R$ 6.242. This marks the third consecutive monthly price hike implemented by the state-controlled company, compounding financial pressure on commercial airlines operating in Latin America's largest economy.

The price of jet fuel in Brazil has surged 74% since March 1, 2026, driven by escalating geopolitical conflicts in the Middle East and subsequent global supply chain disruptions. Petrobras adjusts its wholesale aviation fuel prices on the first day of every month to reflect international oil benchmarks and exchange rate fluctuations. While the company temporarily reduced prices in June and July, the subsequent spikes in August, September, and October have wiped out those relief windows.

This rapid escalation has fundamentally altered the cost structure for domestic carriers. According to data from the Brazilian Association of Airlines (Abear), fuel costs have historically accounted for roughly 30% to 32% of total operating expenses for Brazilian airlines. With the latest price adjustments, fuel now consumes more than 45% of total operating budgets. Abear previously estimated that the country's three dominant carriers—LATAM, Gol, and Azul—faced R$ 5.2 billion in unplanned fuel expenses during 2026 due to the global oil price shock.

To mitigate the immediate cash-flow shock on the aviation industry, Petrobras recently reinstated a financing program that allows fuel distributors to pay for the monthly price increases in three installments. However, the structural burden remains high. Brazilian airlines have already responded to the margin squeeze throughout the year by reducing flight frequencies and temporarily grounding larger aircraft on less profitable routes.

What it touches

The continuous rise in fuel overhead directly impacts the financial recovery of Brazil's major commercial airlines, specifically Azul (AZUL4) and Gol (GOLL4), which are highly sensitive to dollar-denominated operating costs and local fuel pricing. Additionally, the state-run energy giant Petrobras (PETR4) remains under close scrutiny from both public officials and minority shareholders as it balances national economic stability with international market parity.