Congress demands changes at Petrobras and evaluates reviewing taxation on refineries

Less than three weeks after the most recent change in command of Petrobras, congressional leaders are already demanding changes in the internal policy and organization of the state-owned company that would have been promised by the company’s president, Caio Paes de Andrade, and by minister Adolfo Sachsida (Minas and Energy).

In addition, they prepare legislative measures that can review the taxation of refineries. In their assessment, the current rules prevent investments in the country.

Paes de Andrade had his name confirmed by the Petrobras board for the company’s presidency on June 27. Sachsida was appointed Minister of Mines and Energy just over two months ago, on 11 May.

To allies the president of the Chamber, Arthur Lira (PP-AL), criticized the speed of price increases by Petrobras. For him, there is an “unnecessary” nervousness on the part of the oil company to pass on the readjustments.

Lira told these interlocutors that he is following the daily fluctuation of the barrel of oil and highlighted that the price of the commodity has been falling in recent weeks. This reduction, she pointed out, was not passed on by the state-owned company.

The president of the Chamber and the government expect Paes de Andrade to hold a possible readjustment of fuel prices, especially during the electoral campaign. Until then, Bolsonaro has tried, in vain, to hold back the increases.

Since the beginning of the year, Petrobras has increased fuel prices three times. Directors claim that withholding readjustments disrespects rules and the state-owned company’s own statute and that they could become the target of lawsuits both in Brazil and abroad.

Lira also told allies that he was waiting for changes in the company that had been promised by Caio, and cited difficulties in internal policy, in the operation and organization of the state-owned company, in addition to having criticized the pricing policy.

According to Lira, Caio indicated that he would promote internal changes at Petrobras, including trying to change the company’s statute — a task considered difficult to perform due to bureaucracy and difficulty in changing this document.

Lira considers the rules for the appointment of directors at the company to be very strict and believes that they make it difficult for changes in the company and stifle the government. An example of this was the delay of José Mauro Coelho in leaving the command of the state-owned company. After the announcement that he had been fired, the then president stayed in the post for more than a month until he resigned on June 20.

Deputies even defended a change in the State-owned Companies Law to facilitate changes in the company’s command and wanted the federal government to issue even a Provisional Measure, but the idea did not go ahead in the face of resistance from the economic team.

Paulo Guedes (Economy) considered that changing the law would be seen as unnecessary intervention in Petrobras.

Paes de Andrade and Sachsida still have a mission to fulfill, according to Lira, of working for the privatization of the company.

At the end of May, Sachsida formalized the inclusion of the state-owned company in the PPI (Investment Partnership Program) portfolio. 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.

The change in pricing policy is considered more complex. At the end of June, the Minister of Mines and Energy stated that the government does not have the power to interfere in the price of fuel.

On another front, Lira indicated to interlocutors that he could review the tax compensation that, in his opinion, would benefit distributors and create constraints that make the country less competitive. There were no further details on what could be changed.

The mayor mentioned to people close to him, for example, that Petrobras would charge more for the oil it sells to the Landulpho Alves refinery, in Bahia, privatized at the end of 2021, than for refineries in China, thus benefiting the from abroad.

In May, Cade (Administrative Council for Economic Defense) determined the opening of an inquiry to determine whether Petrobras charges more for the product it sells to the Bahia refinery.

Specialists in the sector, however, deny having any kind of rule that benefits distributors. Petrobras has also been denying any type of discrimination regarding the refinery.

Bolsonaro remains in second place in polls, amid rising prices for diesel, gasoline and cooking gas.

For this reason, Bolsonaro articulated with Congress the approval of a complementary bill that establishes a ceiling for ICMS (Tax on Circulation of Goods and Services) rates on fuel, energy, telecommunications and transport.

The government also worked with Congress to approve the PEC for the billions, which doubles the value of the gas voucher to around R$120, guarantees a benefit of R$1000 for truck drivers and taxi drivers and increases Auxílio Brasil by R$400 to BRL 600.