Nominated for the presidency of Petrobras, defended containing fuel prices

Economist Adriano Pires was already a faithful advisor to the government and, recently, by saying “the right things” at the right time, he was nominated to replace General Joaquim Silva e Luna in charge of Petrobras. Luna was informed of her resignation this Monday (28).

Planalto advisers say that, a few months ago, Pires publicly defended the need not to pass on the volatility of oil — a basic input for gasoline and diesel — to the consumer.

This had been the main focus of conflict between Jair Bolsonaro (PL) and the president of the state-owned company. Luna defended the company’s price policy, with the transfer of high oil prices to the consumer, and Bolsonaro sought to delay these readjustments as much as possible as a way of holding back inflation.

A recent survey by Datafolha showed that 75% of Brazilians consider Bolsonaro responsible for the rise in prices. Fuels are among the items that weigh the most in the calculation of inflation measured by the IPCA, which, in the last 12 months, has accumulated a high of 10.54%. It has been more than six months with the index at this level.

In recent statements about prices after the start of the war in Ukraine, Pires has assessed that the exceptional scenario demands a different view on the subject.

“It is not possible to say if the barrel will go to US$ 150 or US$ 200. Now, if that happens, Brazil and the world will have to press the public calamity button and they will not be able to increase consumer prices. a worldwide phenomenon,” he told Poder 360 at the end of February.

Pires also proposed to the government a reform of fuel taxation starting with ICMS. He defended a single rate, charged in reais per litre.

This was the basis of the bill that the government managed to pass in Congress, but which still faces resistance from the states.

For the economist, this rate should be calculated with longer terms than the current 15 days, as a way of amortizing the transfer of oil costs from refineries to distributors.

To encourage the stabilization of prices in the domestic market, Pires was evaluating the creation of a new tax — something criticized by the economic team —, or a specific fund, which was used in other countries and resulted in failure.

Doctor in Industrial Economics from Universidade Paris 13. Adriano Pires has been in the market for over three decades.

He currently directs the CBIE (Brazilian Center for Infrastructure), a consultancy specializing in regulation and strategy for the energy sector, which provides services to governments and companies. He is also part of the Millennium Institute’s analyst team, made up of specialists aligned with the liberal ideology of the Minister of Economy, Paulo Guedes.

In his consultancy, Pires has recently worked for the natural gas distribution sector, as a consultant for Abegás (Brazilian Association of Piped Gas Distributors), a sector currently dominated by Compass, a company controlled by Comgás.

He is a columnist for the website Poder 360 and an analyst with a frequent presence in reports on the oil sector in the Brazilian press.

In October 2021, he wrote in his column that the solution to fuel prices in Brazil is to privatize Petrobras, in a criticism against the granting of hidden subsidies with the damming of prices at the expense of the state’s finances.

“The definitive solution will only come with the privatization of Petrobras. As long as the company is a mixed-capital company, with the State as controller, its corporate benefits and monopolistic practices will be maintained – in favor of the corporation and, often, against the interests from Brazil”, he said.

Pires has been active in the sector for over 30 years and participated in the creation of the ANP (Agência Nacional do Petróleo, Gás e Biocombustíveis) during the Fernando Henrique Cardoso administration, at a time when the Brazilian oil market was opening up to private companies.

At the time, led by David Zylbersztajn, the ANP defended the sale of Petrobras refineries to end the state monopoly in the segment, after the opening of the exploration and production area to foreign oil companies with the auctions of oil areas started in 2000.

During the PT governments, he was a critic of the damming of fuel prices, disclosing estimates on Petrobras’ losses by maintaining values ​​in periods of high international prices.

As a specialist, he collaborated with the transitional government in 2018 and, at the time, his name was quoted to assume both the Ministry of Mines and Energy and the presidency of Petrobras.

For analyst Ilan Arbetman, from Ativa Investimentos, this is a technical indication with a profile recognized by the market as an executive who would not break with the strategy adopted by Petrobras in recent years.

“The profile of Pires also helps to mitigate the effects arising from this new possible movement [de mudanças na estratégia}”. afirmou.

Dentro da empresa, a expectativa é também de poucas mudanças, dado o perfil do nomeado. Uma fonte ligada à direção da empresa ouvida pela Folha avaliou como um nome que “tem enorme conhecimento sobre o setor”.