By SABRINA VALLE

Petrobras CEO Maria das Gracas Foster has told Brazil finance minister Guido Mantega, who chairs the state-run oil producer, that it needs at least a 10% increase in fuel prices, said a person with direct knowledge of the talks.

Foster said at a recent board meeting that the gasoline and diesel increase is needed to reduce the cost of subsidizing fuel imports, the person said, asking not to be identified because the discussions are private. Foster also said a 10% rise wouldn’t be enough to completely eliminate subsidies or reduce the debt-to-equity ratio, or leverage, to an internal target of 35% by year-end, the person said.

A weaker Brazilian real compared with the US dollar has increased the cost of importing gasoline and diesel and put a strain on the Rio de Janeiro-based company’s finances, the person said. It’s the first time this year Foster has specified the minimum increase needed at a board meeting, the person said.

Brazil’s real is the worst performing major currency in the past month, down 9.1% against the US dollar. Fuel subsidies have cost Petrobras at least 60 billion reais ($24 billion) since 2011, according to calculations by Instituto Brasileiro de Petroleo, an industry lobbying group.

Petrobras’s press office didn’t immediately comment when contacted by e-mail. The finance ministry declined to comment on fuel price policy when contacted by e-mail.

Shares rose 6.1% to 18.35 reais in Sao Paulo.

Mantega said in a Sept. 2 interview that Petrobras should increase fuel prices later this year and that the amount would depend on the foreign exchange rate among other variables.

Petrobras said on Nov. 29 it had approved a new methodology for adjusting gasoline and diesel prices to guarantee that indebtedness and leverage ratios would return to target levels within two years. Foster told the board that the company won’t be able to meet this target before the end of 2015 if domestic fuel prices only rise 10 percent and the exchange rate remains at current levels, the person said.

The company never disclosed details of the methodology and it hasn’t approved a single fuel price increase since it made the announcement last year, when it increased gasoline and diesel prices by 4% and 8%, respectively.