Government already lists arguments for the new president of Petrobras to hold readjustments until the election

Stagnant in the polls of voting intentions, President Jair Bolsonaro (PL) hopes that Caio Mário Paes de Andrade, the new president of Petrobras, seeks to avoid a readjustment in fuel prices, especially during the election campaign.

For that, Paes de Andrade’s allies say that one of the arguments he should explore is that the state-owned company needs to reinforce the social part of its ESG agenda (the acronym for environment, sustainability and governance).

The password was already given last week by Minister Adolfo Sachsida (Mines and Energy), during a hearing at the Mines and Energy Commission of the Chamber of Deputies. He argued that companies should “think about the brand’s reputation for the long term”, not just the short term.

“Countries in the Western world give great value to the ESG agenda. I think it is also up to Petrobras to value this agenda, because it is a company that is listed on the Stock Exchange,” he said.

He also said that all oil companies in the world have minority interests and “all are taking losses to preserve the brand”, citing those that left Russia because of the Ukrainian War.

“It is natural that Petrobras also makes sacrifices”, said Sachsida, before noting that the decision was not his, but “the president of Petrobras, his board and his directors”.

Follow Bolsonaro’s attempts to hold back prices

Until then, Bolsonaro has tried, in vain, to hold back the readjustments. Before the latest increase was announced on June 17, he rehearsed publishing an interim measure aimed at at least delaying the increase.

Former minister Bento Albuquerque (former MME) was delegated the mission of talking to José Mauro Coelho, former president of Petrobras who had been his nominee, and convincing him to wait for the approval of the bill that set a ceiling of 17% to 18% on ICMS on fuel. José Mauro also heard the request at a first meeting at the Planalto Palace.

After the project was approved, on June 14, government officials asked Mauro to wait for practical effects on the bombs. In vain.

On the verge of the new readjustment, a wing of the government considered publishing a provisional measure altering a part of the State-Owned Companies Law to try to delay it. The idea, however, was rejected due to the resistance of the economic team, although there are still those who insist on it.

Directors claim that withholding readjustments disrespects rules and Petrobras’ own statute and that they could become the target of lawsuits both in Brazil and abroad.

To avoid the change in prices with any legal certainty, say Petrobras directors, former board members, it would be necessary to change the State-owned Companies Law, the company’s internal statute, which is seen as very difficult, and three other laws.

Therefore, the bet is that Paes de Andrade will at least try to invest in the discourse related to the ESG agenda to stop changes in prices, in a dribble to the statute.

Council members say they see no sense in the social argument and claim that the main problem is that holding down prices increases the risk of diesel shortages.

Petrobras has already warned the government that the second half of the year will be worse. Diesel inventories are low, consumption in Europe is increasing and the hurricane and tornado season could hamper production.

Bolsonaro also wants to change Petrobras directors

To support the new president, the government also needs to replace the company’s directors with a group more aligned with the Planalto, something that depends on the approval of the company’s Board of Directors, which today is still composed of executives more connected to the financial and oil markets.

The government would have to double down on the resistance of the current collegiate or wait for the shareholders’ meeting that will elect the new board, which still has no set date and requires a minimum period of 30 days between the call and the meeting.

Bolsonaro already has a list of nominees for this occasion, made up mostly of public office holders, including the number two in the Civil House, Jonathas Assunção.

In theory, directors of the state-owned company must also follow the Law of State-Owned Companies, which requires proof of previous experience and prohibits names linked to parties or public administration.

This Friday (24), however, the committee responsible for analyzing the CVs considered that Paes de Andrade meets these requirements, despite having a degree in social communication and having made a career in a technology company.