Analysis: Goverment blitz makes enemy Petrobras to evade responsibility for price hike

The fuel boom has become such a dangerous electoral threat that it made Jair Bolsonaro (PL) take on a battle with Petrobras once and for all. In the government blitz carried out on the company in recent days, the president and his allies began to treat the state-owned company as a political adversary.

The new price increase announced by the company this Friday (17) reinforced the perception that the government is stuck in the search for solutions to the high cycle that keeps Bolsonaro awake at night. Not even the intense pressure exerted by ministers and parliamentarians was able to stop Petrobras’ decision.

Bolsonaro himself had already been treating the state-owned company as an enemy in speeches and interviews, but the tone became more explicit. On the eve of the increase, the president said that a price increase would be a sign of a “political interest to reach the federal government”.

The behavior is part of a well-known Bolsonaro tactic. When the government is weakened or unable to devise effective responses to a problem, the president tends to manufacture political rivalry.

In the case of Petrobras, the solution was used in the face of the president’s frustrations with the initiatives to dampen the rise in fuel prices and, mainly, with his inability to build a consensus within the government to change the company’s pricing policy.

By treating the state-owned company as an antagonist, Bolsonaro adds a layer to his efforts to extricate himself from responsibility for rising prices. In this view, the company actively works to prevent its government from controlling the effects of the pandemic and the Ukrainian War on fuel.

The coordinated attack on the command of Petrobras suggests that this will be the official speech of the government. As soon as the company’s top management released the increase, Minister Ciro Nogueira (Casa Civil) said that the state-owned company abandoned the Brazilians. The president of the Chamber, Arthur Lira (PP-AL) stated that the company had entered a “state of war” with the people.

The centrão participates in this operation because it has a direct interest in Bolsonaro’s re-election — since the current arrangements (and a lot) favor these parties. But the bloc also has concerns about preserving its own political capital.

The malaise with inflation usually makes voters go to the polls in search of change. The center would not suffer much from an eventual defeat by Bolsonaro, but it would have a great loss if the general annoyance fattened left-wing benches and punished the center-right coalition that supports the bloc.

The joint reaction can also be explained by the fact that the new increase thwarts the most recent plans of the Bolsonaro-centrão consortium. The readjustment announced now limits the effects of the expected reduction with the approval of the ceiling for the ICMS charged on fuels. The tax cut should be applied starting next week, but Petrobras’ new prices will already take effect on Saturday (18).

The new moment of the clash with Petrobras shows that the government’s toolbox is getting emptier. After the increase, Lira spoke of the possibility of doubling the state-owned company’s profit tax, reverting the money raised to a diesel subsidy for truck drivers.

The proposal serves as a political weapon. The threat of increasing Petrobras’ taxation is more than obvious pressure for the company’s Board of Directors to effectuate the dismissal of the current president, José Mauro Ferreira Coelho, and accelerate the change of command of the company.

In the battle with the company, Bolsonaro also launched the letter of the risk of a truck drivers strike, along the lines of the May 2018 strike. possible breakdowns in the economy.

Still on the list of threats, Bolsonaro defended the opening of a CPI (Parliamentary Commission of Inquiry) to investigate the direction of Petrobras.

The political fight is unlikely to bring new votes to Bolsonaro’s camp – as the government hoped when working for a reduction in fuel prices. But the clash could still help the president to assuage the bad mood that a slice of the electorate would direct at him with the new increase.