Monday, June 17, 2024

LATIN AMERICA | 24-05-2022 08:56

Brazil's Bolsonaro fires third Petrobras chief as fuel prices soar

Brazilian President Jair Bolsonaro dismisses president of state oil giant Petrobras – who had been in the job for only 40 days.

Brazilian President Jair Bolsonaro on Monday dismissed the president of state oil giant Petrobras, who had been in the job for only 40 days.

Fuel prices in Brazil have increased more than 33 percent in the past year, according to official figures, driving annual inflation of more than 12 percent and hurting Brazilians' wallets.

Inflation is a central issue as the far-right Bolsonaro seeks re-election in October and trails leftist ex-president Luiz Inácio Lula da Silva in the polls.

"The Federal Government, as controlling shareholder of Petroleo Brasileiro SA, Petrobras, advises that it decided to make a change to the Company's presidency," said the Mining & Energy Ministry  in a statement.

Without giving specific reasons for the dismissal, it thanked José Mauro Coelho for his service but said: "Brazil is currently experiencing a challenging moment, due to the effects of the extreme volatility of hydrocarbons in international markets."

Coelho was appointed in April to finish the term of his predecessor, Joaquim Silva e Luna, and became the third Petrobras president to be dumped by Bolsonaro with fuel prices soaring.

The government proposed for Coelho be replaced by Caio Mário Paes de Andrade, the current secretary for de-bureaucratisation at the Economy Ministry.

He must be confirmed by the company's board of directors.


Inflation worries

Earlier this month, Bolsonaro also replaced his longtime energy minister, Bento Albuquerque, days after Petrobras reported record quarterly profits.

Bolsonaro said those profits amounted to "rape," and called on Albuquerque and Coelho to stop Petrobras from raising prices.

However, Albuquerque and the Energy Ministry had no direct role in price decisions by Petrobras, whose pricing policy is based on the international oil market.

Disregarding the president's fervent demands, Petrobras went on to hike diesel prices by an additional 8.9 percent in the following days.

According to a statement by the Mining & Energy Ministry, proposed new Petrobras president Andrade holds degrees from Harvard and Duke universities in the United States.

"The nominee has all the qualifications to lead the company to overcome the challenges imposed by the current situation," the government statement said.

But according to economist Andre Perfeito of the consulting firm Necton, Brazilians should likely expect more of the same given Andrade's background.

"It does not seem reasonable to assume that Petrobras' pricing policy will change, quite the contrary," Perfeito said in a statement.

"Andrade is a professional with liberal values and close to [Economy] Minister Paulo Guedes," who launched a study of privatizing Petrobras, added Perfeito.



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