Government would have to change Petrobras’ statute to change pricing policy, says Adriano Pires

The federal government will have to change Petrobras’ bylaws if it decides to participate in decisions on fuel prices at the state-owned oil company, the director of the Brazilian Infrastructure Center (CBIE), Adriano Pires, told Reuters.

A change in Petrobras’ fuel price policy, so that the government can control impacts on prices in the domestic market, was one of the flags raised by the recently sworn-in president Luiz Inácio Lula da Silva (PT), the consultant pointed out.

“If it doesn’t go in that direction, it will be a big surprise,” said Pires, when asked. “He won the election, he decides.”

Petrobras operated at a sharp drop of about 6% this Monday (2), after President Lula reinforced his view on the company’s role in the country’s development and revoked acts that gave progress to the privatization of a series of state-owned companies, including they the oil company.

The Minister of Finance, Fernando Haddad, said this Monday that Lula wants to wait for the new board of directors of Petrobras to take office to make a decision on fuels, after the new government has extended fuel exemptions for two months for gasoline and alcohol and for one year for diesel, biodiesel and cooking gas.

The minister did not detail, however, what needs to be agreed with the future new management of the state oil company.

“Petrobras does not have a tax policy, he does,” said Pires, pointing out that Petrobras now needs to respect international market prices.

Petrobras’ bylaws have for some years already provided for conditions for the company to have its activities guided by the Union in order to contribute to the public interest.

Among the current requirements, the statute provides that the company must be compensated by the government when called upon to carry out some of these activities.

The rules were included after the oil company suffered billionaire losses in the past when it was forced by the federal government to sell fuel below the international market, at a time when the country demanded ample imports.

In order for there to be changes in the document, which governs the company’s rights and duties, a proposal from the Board of Directors at a shareholders’ meeting is required. Such a move takes months to execute.