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Petrobras CEO quits in fuel price standoff with Bolsonaro


By AFP
Published : 21 Jun 2022 08:47 PM | Updated : 21 Jun 2022 08:47 PM

The CEO of Brazil's state-owned oil company Petrobras, who has stayed in his post despite being fired by Jair Bolsonaro in May, resigned Monday after a new fuel price hike that enraged the far-right president.

Jose Mauro Coelho is the third Petrobras CEO to leave since February last year in a stand-off between the company and Bolsonaro over fuel prices. Petrobras announced Coelho's resignation on Monday.

The company said Fernando Borges -- its head of exploration and production -- would take over temporarily until government pick Caio Paes de Andrade, an economy ministry official, assumes the top job.

Coelho was appointed for a one-year term in April after Bolsonaro fired his predecessor Joaquim Silva e Luna in March after slightly more than a year in the post.

The far-right president said then that the price of fuel -- set by Petrobras but tied to international market movement -- was "unaffordable" and amounted to a "crime" against Brazilians.

Silva e Luna, in turn, had replaced Roberto Castello Branco, fired by Bolsonaro in February 2021.

- 'Absurd' profits –

In May, Bolsonaro dismissed Coelho after just 40 days on the job. He had been waiting to be formally removed at the company's next shareholders' meeting, scheduled for July.

Bolsonaro, seeking reelection in October, is widely blamed by voters for double-digit inflation, polls show, on the back of skyrocketing global and local fuel prices.

Bolsonaro faces an uphill battle against leftist ex-president Luiz Inacio Lula da Silva (2003-2010), remembered for presiding over a booming economy.

Brazil has seen fuel prices surge by over 33 percent in a year, according to official figures.

Inflation stands at 11.73 percent, far above the central bank's target of 3.5 percent.

Russia's war in Ukraine has led to a sharp rise in crude prices in recent weeks, adding to the pressure.

On Friday, Petrobras announced a 5.18 percent hike in gasoline prices and more than 14 percent for diesel, blaming "a challenging scenario in Brazil and the world."

Bolsonaro reacted angrily, saying Petrobras "could sink Brazil in chaos."

The company reported a net profit of 44.6 billion reais (about $8,6 billion) in the first quarter of this year -- about 38 times the result of a year earlier.

Arthur Lira, the president of Brazil's chamber of deputies and a Bolsonaro ally, has proposed raising taxes on Petrobras profits -- which he has described as "absurd."

Congress is also mulling a Bolsonaro proposal to lower the tax on fuel.

Petrobras shares were volatile in Monday trade -- after a temporary halt to morning trading on news of Coelho's resignation and then a two percent drop on the Sao Paulo Stock Exchange, they finished up 1.14 percent.