Petrobras Council, which gave the green light for fuel increase, has a majority indicated by the Bolsonaro government | Economy

Petrobras announced this Thursday (17) a new adjustment in fuel prices. The highs, of 5.18% in gasoline sold to distributors and 14.26% in diesel, should put even more pressure on inflation – and provoke new wear and tear in the Bolsonaro government.

Diesel had not been readjusted since May 10 – 39 days ago. Already the last rise in the price of gasoline had been on March 11 – 99 days ago. LPG prices will not change. The readjustments are within Petrobras’ rules.

For almost a month, the government has been trying to change the command of Petrobras to force a change in the oil company’s pricing policy: in May, the Ministry of Mines and Energy announced the resignation of José Mauro Ferreira Coelho from the presidency of the company and the appointment of Caio Mário Paes de Andrade, current Secretary of Debureaucratization of the Ministry of Economy, for the post.

Together with the executive, the government intends to change the state-owned company’s advisers, and sent a list with eight names of total trust from the Planalto Palace and the economic team.

The government pressured José Mauro to resign, but he resisted – and the government needs to wait for the legal procedures, which require the board to convene a shareholders’ meeting 30 days after receiving the nomination of the directors. It is this assembly that elects the directors – but the government has the majority of votes as it is the largest shareholder.

The government’s rush to try to change the board of directors and the board of the state-owned company aimed to avoid further fuel price readjustments until the election (which the government has already failed to achieve).

This is because the readjustments are defined by the Board and the company’s management. But the federal government appoints the majority of the company’s directors. Today, the council is made up of 11 members. Of these, six were appointed by the Bolsonaro government.

Before José Mauro Ferreira, the government had already fired two predecessors: Roberto Castello Branco and Joaquim Silva e Luna.

International Parity Price

Since 2016, Petrobras started to practice the International Parity Price (PPI), which is guided by the fluctuations of the international market – and which makes the price rise following the rise of oil abroad, and also suffer the effects of the rise in the dollar. here inside.

The current pricing policy is anchored in requirements made by the State-Owned Companies Law, for mixed capital companies, such as Petrobras (which have the government as the majority shareholder, but other shareholders on their board). The law, enacted in the Temer government, determines that the interests of minority shareholders must be protected – with that, the company could not ‘insure’ the readjustments.

The policy change was a response to the price controls that were in force at the state-owned company between 2011 and 2014 as part of a strategy by the government of then-President Dilma Rousseff (PT) to curb inflation, but which severely affected the company’s cash.

Although the state-owned company does not have a monopoly on refining in Brazil, Petrobras is still the main fuel supplier in the country. Thus, the prices charged by the company end up having an impact on the entire chain.

According to Valdo Cruz’s blog, at the meeting in which the council approved the new high in fuel prices, held on Thursday (16), councilors linked to the government tried to convince the company to hold the increase.

The company’s board, however, said that President Jair Bolsonaro’s team did not accept to grant a subsidy to the state-owned company and to private importers to bring the most expensive diesel abroad and sell it in Brazil at a lower price.

According to the board told the council, the only way to avoid the increase would be to grant the subsidy, which was not authorized by the government. Therefore, the state command said that, if it held up the increase, it would have to import more expensive diesel and cause damage to the state-owned company, creating a risk of product shortages or lawsuits against the company in court.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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