Alliance with centrão increases pressure to change Petrobras president

The president of Petrobras, General Joaquim Silva e Luna, runs the risk of being replaced next month if Jair Bolsonaro (PL) reinforces the agreement with the centrão, a political group that, for the reelection of the president, defends a more flexible name to control fuel prices.

In 2021, Bolsonaro fired the first president of Petrobras under his management, Roberto Castello Branco, also amid a crisis over fuel prices. The expectation that Silva e Luna would change the policy, however, was not confirmed.

The general has been suffering wear and tear as he preserves the state-owned company’s independence from passing on increased costs to the market.

Aides to the president claim that he even asked Silva and Luna to hold prices. However, Bolsonaro did not signal whether there would be compensation.

Since then, a process of frying began on various fronts of the government.

Bolsonaro now wants a name that is more aligned with the government and defends Rodolfo Landim, who was once part of the Petrobras board and now presides over Flamengo.

Planalto has already announced that Landim will be appointed to the oil company’s board, which will take place on April 13, the date of the general shareholders’ meeting.

Silva e Luna needs to be excluded from the board by the assembly to make way for Landim’s approval as the new president.

There are still other candidates for the post. This week, the Minister of Economy, Paulo Guedes, started defending his special secretary Caio Paes de Andrade for the command of Petrobras.

Guedes did not like the proposal defended by the Minister of Mines and Energy, Bento Albuquerque – and which is being processed in Congress -, to create subsidies to contain the rise in fuel prices.

Bento also measures forces with the Chief Minister of the Civil House, Ciro Nogueira (PP-RN), who, in order to add support from the center, wants to indicate names for regulatory agencies linked to the Ministry of Mines and Energy (such as ANP and Aneel), electric power companies, such as Itaipu, and Petrobras.

Centrão parties are the government’s support base and should take up its reelection campaign.

In defense of the general, a shock troop of allies tries to convince Bolsonaro this week that it is better not to remove him from the post.

This team includes high-ranking military personnel linked to the Minister of Mines and Energy, Bento Albuquerque, both in the army and in the Navy, and who are close to Bolsonaro.

Planalto advisers claim that the president preferred to wait for the evolution of oil and exchange prices to hit the hammer.

In favor of Silva and Luna, the market’s expectation of a possible outcome to the war between Russia and Ukraine, which has been reducing the price of oil, counts. Despite the signs of a fall, Brent barrel prices remain at around US$ 100.

Another factor favorable to the general is the recent appreciation of the real against the dollar, which also contributes to the fall in fuel prices.

That is why, privately, many politicians — especially from the North and Northeast — sought Bolsonaro to defend Silva and Luna.

For them, without the readjustments, dammed for almost two months, there would be a risk of shortages with potential damage to the president’s popularity.

Petrobras’ statute defines that the company has autonomy in its pricing policy. There is the possibility of containing transfers, when the variation in the price of oil suffers a spike, but, in this case, the Union must reimburse the company for the losses generated in the period of containment of the readjustments.

Since the pandemic, the price of petroleum-derived fuels, such as gasoline, diesel and cooking gas, has been rising as the main producers reduced their activity due to the retraction in consumption. With the resumption of demand, there was not enough time for supply to react, which caused prices to rise.

The war between Russia and Ukraine aggravated this scenario, since the region is a relevant producer of the commodity.

In Brazil, Petrobras had no other option and implemented a mega-increase in prices after almost two months without passing on the increase in input to distributors.

The announcement of the 19% readjustment on gasoline in refineries and 25% on diesel occurred before the approval of a bill in Congress that standardizes and reduces the ICMS (state tax) on fuels. This generated dissatisfaction from Bolsonaro.

People who participated in the discussions with the government and the company say that there was a “combined game” that the readjustment would only occur after the reduction of ICMS. With the transfer, at stations further away from the country, such as in Acre, the liter of gasoline reached R$ 11. The gas cylinder was sold for R$ 150.

As fuel is one of the items that weighs the most in calculating inflation, soaring prices worry Bolsonaro, who fears losing popularity in an election year.

The president began to publicly criticize the management of Silva e Luna, accusing her of being insensitive to the suffering of the population.