Ministry formalizes request to include Petrobras in privatization program

The Ministry of Mines and Energy reported on Monday night (30) that it had formalized to the Ministry of Economy the request for Petrobras to be included in the PPI (Investment Partnership Program) portfolio, with an eye on a future privatization of the company.

Petrobras’ qualification for the PPI depends on the approval of the program’s board and would be the first step in a long process that has already faced resistance in Congress.

In the fuel sector, the privatization announcement is seen as another smokescreen for the government at a time when the rise in prices weighs on President Jair Bolsonaro’s (PL) electoral prospects.

The Chief Executive has already publicly said he wants to privatize the company in the face of the political wear and tear suffered by the government due to the readjustments.

The idea became an official government banner after the change of command in the MME. Days after Petrobras announced yet another diesel price adjustment, Bolsonaro fired then-minister Bento Albuquerque and appointed economist Adolfo Sachsida as his successor.

Self-declared Bolsonarist and liberal, Sachsida announced his intention to privatize Petrobras in his first speech as new minister.

For this, however, the government needs a constitutional amendment that makes the monopoly that the Union currently holds over oil exploration more flexible.

A constitutional amendment requires the support of 308 of the 513 deputies and 49 of the 81 senators, a high quorum that demands cohesion from the governing base in Congress.

The financial market itself does not see any chance of approving the process even in this mandate.

Former President Luiz Inácio Lula da Silva (PT), who leads polls for voting intentions for the Presidency of the Republic, is critical of privatization. “Anyone who buys Petrobras will have to talk to us after the elections,” he said at an event in Juiz de Fora (MG).

According to the MME, studies on the actions necessary for the privatization of the company will be produced by an inter-ministerial committee to be established between the Ministry of Mines and Energy and the Ministry of Economy.

“The process is fundamental for attracting investments to the country and for the creation of a plural, dynamic and competitive market, which will promote efficiency gains in the energy sector and a vigorous generation of jobs for Brazilians”, says the ministry.

“The proposal is timely due to the current energy situation, given the global geopolitical situation, the discussions on the pace of the energy transition and the global realignment of investments”, he adds.