Petrobras announces new fuel hike amid criticism from Bolsonaro

the state oil company Brazilian Petrobras announced this Friday a new increase in gasoline and diesel, unleashing new criticism from President Jair Bolsonaro, who warned that the company “could plunge Brazil into chaos” in the face of soaring inflation.

Following the announcement, the common shares of Petrobras lost 6.09% after falling to around of 10% on the Sao Paulo Stock Exchange, given the political noise and fears of possible measures of Congress to alter the tax policy that governs the company.

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The largest company in Latin America said in a statement that it will raise the price of gasoline at its refineries by 5.18% and the price of gasoline by 14.26%. of diesel from this Saturday, before “the challenging scenario in Brazil and the world”, in reference to the war in Ukraine.

Petrobras He stated that “he is sensitive to the moment that Brazil and the world are facing” and that he understands the impact “on the lives of citizens.”

“However, when there is a structural change in the level of global prices, it is necessary that Petrobras seek convergence with market prices,” says the company, which also states that this measure eliminates “risks of internal shortages.”

The company’s pricing policy follows the international price of crude oil, something strongly questioned by the government.

The new increase applies three months after the last in the case of gasoline and 40 days for diesel.

“Treason to the people”

Bolsonaro He has been asking for months that the state company contain the increase in fuel prices, which drive inflation, damaging his popularity before seeking re-election in October.

At the end of May, he removed the third president of Petrobras appointed by him since he came to power, José Mauro Coelho, only a month after taking office, but his departure has not yet materialized due to obstacles in the legal procedures to do so.

This Friday, Bolsonaro accused Coelho and the directors of Petrobras of “betrayal of the Brazilian people”, in dialogue with a local radio. And he asked congressional leaders to establish a Parliamentary Commission (CPI) to investigate them.

Petrobras “It can plunge Brazil into chaos,” he warned in separate statements, recalling a truckers’ strike in 2018 that caused “dire consequences for the economy.”

The Brazilian Association of Motor Vehicle Drivers (Abrava), which groups truckers, threatened this Friday with a strike and expressed its “outrage” at the increases in a note.

Bolsonaro again criticized the profits of Petrobras: “It’s something stupid, it earns six times more than the average oil company in the world.”

Petrobras reported a net profit of 44,561 million reais (8,605 million dollars) between January and March of this year, about 38 times what was obtained in the same period of 2021.

Crash in the stock market

The president of the Chamber of Deputies, Arthur Lira, proposed raising taxes on the company’s profits, which he described as “absurd.”

He suggested, for example, “doubling” the so-called Social Contribution on Liquid Profit, and that these resources cover the differenceia between the local price of diesel with that abroad.

According to Jansen Costa, from the investment advisory firm Fatorial Investimentos, investors reacted by causing a sharp drop in the oil company’s shares “after those comments to interfere with the company’s taxation,” he said, given the possible impact on its results.

On the judicial side, the judge of the Federal Supreme Court André Mendonca, appointed by Bolsonarogave the company five days to explain in detail the criteria for the increases in the last five years.

According to Costa, the drop in the international price of oil (-6.28% WTI), “added to a movement of risk aversion”, contributed to a “perfect storm” on the shares of Petrobras.

The fall of Petrobras it dragged down the São Paulo Ibovespa index, which fell 2.9%.

Source: Elcomercio

Ronald Payne

I, Ronald Payne, am a journalist and author who dedicated his life to telling the stories that need to be said. I have over 7 years of experience as a reporter and editor, covering everything from politics to business to crime.