Mendonça, of the STF, orders actions to ‘bring transparency’ to Petrobras’ pricing policy

Minister André Mendonça, of the Federal Supreme Court (STF), determined this Monday (22) that the ANP (National Petroleum Agency) and CADE (Administrative Council for Economic Defense) present schedules of measures related to Petrobras to “ensure transparency and regularity” of fuel prices in the country.

He ordered the ANP and CADE to adopt measures “to bring transparency about Petrobras’ pricing policy” and “the regularity of this policy in light of current legislation.”

The actions that must be carried out are directed to the price formation policy of the state-owned company. Previously, in July, Mendonça himself had already determined that Petrobras should present “meticulous information” about the criteria adopted by the company in its pricing policy in the last 60 months.

It had also demanded information from the ANP and CADE on the subject.

Mendonça was nominated for the Supreme Court last year by President Jair Bolsonaro (PL), who has criticized fuel prices as one of his reelection campaign platforms.

In this Monday’s decision, he gave a period of five days for the ANP to present a schedule for the adoption of measures that should be adopted in the next 30 days for the “regulation and inspection of economic activities that are part of the oil, natural gas and of biofuels, especially in view of Petrobras and its pricing policy”.

“I clarify that the indication of specific action in relation to Petrobras derives from the company’s dominant position and its effective capacity to establish prices in the Brazilian market”, said the minister.

It also determined that Cade submit a schedule with measures to “determine the regularity of Petrobras’ performance in setting prices for the Brazilian consumer, in view of its status as a price maker for the Brazilian consumer, under the terms of the governing legislation”.

According to Mendonça, the action reported by the ANP related to Petrobras was only in relation to LPG (Liquefied Petroleum Gas), which would be “just one of the fuels whose price increase has been causing a relevant social risk to the Brazilian population”.

“I note, at first, that the ANP’s performance, in addition to being partial and restricted, is not in line with the seriousness of the emergency situation characterized by the fuel crisis and with the current situation of the facts”, he said.

Also according to him, Cade’s level of attention in relation to Petrobras is not compatible with what is expected of the body “in terms of the impacting national emergency scenario brought about by the fuel crisis, which has affected the Brazilian population in general”.

In July, the minister ordered Petrobras to present all the documents that supported decisions on prices in the last 60 months and also demanded “a copy of all documentation that supported its decision (including a copy of the decision-making act itself) regarding the adoption of the current pricing policy, specifically with regard to the use of the International Parity Price (PPI), as a determining factor of this policy”.

The PPI is one of the main targets of Bolsonaro’s criticism, as it forces Petrobras to be in line with the prices practiced in the international market.