In Brazil, President Jair Bolsonaro fires Petrobras CEO over rising fuel prices

Brazilian President Jair Bolsonaro (left) and Reserve General Joaquim Silva e Luna at a naval base in Itaguai, Brazil, December 14, 2018.

The decision will not really be effective until April 13, during the board of directors of the oil company Petrobras. But, on Monday March 28, the president of the company, the reserve general Joaquim Silva e Luna, was dismissed by the head of state, Jair Bolsonaro – a decision confirmed in the evening by the minister of mines and ‘energy. He remained at the helm of the group for less than a year and, like his predecessor, Roberto Castello Branco, his relations were very strained with the President of the Republic on the thorny question of prices at the pump.

According to the Brazilian specialized press, the fate of the general, former defense minister, was sealed on March 10, when Petrobras announced a new increase of 18.8% in the price of gasoline and 24.9% in that diesel. Over the eleven months of management of Joaquim Silva e Luna, the cost of diesel has increased by 47% (+ 27% for gasoline and gas).

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The Head of State would not have appreciated that this latest increase took place at the beginning of March, at the same time as the reduction in fuel taxes, approved by Congress and sanctioned by the executive. As a result, the population has in no way perceived the budgetary effort made by the State, as confirmed by an opinion poll conducted by the Datafolha polling institute: 68% of Brazilians consider the government responsible for the rise in the price of fuels. Seven months before the presidential election, curbing inflation has become the president’s absolute priority, starting with prices at the pump.

Maintenance of the import parity price policy

The general’s dismissal sparked fears of turbulence in the Brazilian oil giant’s stock, as was the case with the departure of Roberto Castello Branco in February 2021, when the company had lost 20% of its stock market value. . At the time, the designation of a soldier had raised fears of an authoritarian intervention to control prices, which Joaquim Silva e Luna never did. He again reaffirmed it to the press on Tuesday: Petrobras follows guidelines that cannot be challenged for political issues. »

The group’s share fell only 2.6% at the opening of the stock market on Tuesday in Sao Paulo, and even recovered during the day. The name of his successor has, according to the consecrated formula, “reassured the markets” This is Adriano Pires, director and founder of the Brazilian Center for Infrastructure, a consulting firm specializing in fossil fuels. This economist, who did his doctorate at the University of Paris-XIII (now Sorbonne-Paris-Nord) in 1988, precisely on the “system of energy prices in Latin America”, has always opposed any price control by the Brazilian state.

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