The move comes shortly before the end of an exemption period of a federal tax on diesel that would make the most used fuel in Brazil more expensive for consumers.
Diesel prices will be cut by 0.30 real to 3.48 reais ($0.7189), the oil giant said, adding they are now down 22.5% this year.
Petrobras had already lowered diesel prices by 6.7% on Dec. 9, but analysts said at the time there was room for further cuts as they were still above import parity prices.
Later on Tuesday, Finance Minister Fernando Haddad said that Petrobras' diesel price cuts should "more than offset" the return of taxes on the fuel, scheduled for the first day of 2024.
Gasoline prices were not tweaked.
Analysts at Goldman Sachs said they believe the company's refining margins will "remain at healthy levels, even after accounting for today's announcement."
