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Petrobras, the largest company in Latin America, reported Monday that its president, José Mauro Coelho, has resigned from his post. The decision was made in the midst of a controversy over the rise in fuel prices. This is the fourth change of direction proposed by the government since Bolsonaro came to power in 2019.
Through a statement, José Mauro Coelho, CEO of Petrobras, announced his resignation from the company. In May, Brazilian President Jair Bolsonaro had already fired Coelho and appointed Caio Paes de Andrade, a senior state official, as the new president of the state oil company. However, Coelho remained in his position while the company organized the appointment of the new CEO.
After knowing the resignation, the Board of Directors of the oil company appointed Fernando Borges, current executive director of exploitation and production of the company, as interim president while it is decided whether Paes de Andrade finally assumes the position. The decision will be made at an Assembly scheduled for July. The Brazilian state is the largest shareholder.
Coelho had assumed the presidency of the state company in early April, but two months after taking office, he resigned due to pressure from Bolsonaro.
Last Saturday, June 18, Petrobras increased the price of gasoline at its refineries by 5.18% and the cost of diesel by 14.26%. The Brazilian president disagreed with him and immediately called on Congress to initiate an investigation of the company’s leaders, in addition to accusing them of profiting from increases.
Bolsonaro’s pressure and his attempts to maintain the economy
Brazil currently registers high inflation. In May, the Brazilian Institute of Geography and Statistics (IBGE) reported that the country is facing its highest level of inflation in the last 18 years, with an increase of 12.13%, a rate not seen since 2003.
Bolsonaro is looking for efficient measures to contain fuel prices, avoid an increase in transport prices and contain inflation, which could affect his popularity to be re-elected in the Brazilian presidential elections, which will be held in October this year.
The president has criticized the international price of crude oil, a strategy used by the oil company to establish fuel price policy. The rise in fuel prices came just three months after an increase in the price of gasoline and 40 days after an increase in diesel.
As a contingency measure, the Brazilian Congress is studying a proposal by Bolsonaro, announced on June 7, to lower fuel taxes and, consequently, their prices to consumers. For his part, the president of the Chamber of Deputies, Arthur Lira, proposed raising taxes on the company’s profits.
After learning of Coelho’s resignation, the São Paulo Stock Exchange closed this Monday in green despite the day of volatility, with an Ibovespa index at 0.03%, advancing to 99,852 points.
Although the news initially generated nervousness in the market, the resignation of the president of Petrobras had already been anticipated by the local press and Bolsonaro’s discontent with Coelho’s management was known.
A problem that affects the world
Brazil is not the only country facing rising fuel prices. The war in Russia and Ukraine, the ravages of the pandemic due to Covid-19 and global inflation have caused consumers to notice a noticeable increase in gasoline and diesel prices.
Fuel prices, which are measured in dollars, are determined by a combination of the cost of crude oil, taxes, purchasing power, the wealth of each country, government subsidies and refinery brokerage.
Such high fuel prices have not been experienced since 2008. For its part, the United States reported through the Department of Energy that only in May of this year the price of regular gasoline increased by 48.9% in its annual comparison. The trend remains the same in most countries.
Given the rise in prices, President Joe Biden announced that he cannot take further measures to control the situation and that there is a global stabilization to improve consumer prices.
Meanwhile in Brazil, new announcements are expected by the Petrobras board to define who will preside over the company. Similarly, the country is waiting for the measures that the Government will take to control fuel prices.
with EFE
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