Former Petrobras president Roberto Castello Branco said this Monday (28) on TV Cultura’s Roda Vida program that he even ignored messages from President Jair Bolsonaro (PL) questioning the increase in fuel prices during his administration.
The interview took place on the day that the current president of the company, General Joaquim Silva e Luna, received a communication that he would leave the command of the state-owned company. In his place, the government appointed economist Adriano Pires.
Doctor in Economics from FGV (Fundação Getúlio Vargas), with experience at the University of Chicago, he was nominated for the position in 2019 by the Minister of Economy, Paulo Guedes.
Last year, Castello Branco was removed by a decision by President Bolsonaro, after price readjustments made by Petrobras and speeches in favor of privatization of state-owned companies.
This Monday, the economist said that he even ignored messages from Bolsonaro, questioning the reason for the increase in fuel prices.
“The pressure comes in the form of messages, messages (…) but I continued doing what I thought was right, to the displeasure of some. [O presidente Jair Bolsonaro] He even texted me and I just didn’t answer. I provided information to Minister Bento [Albuquerque, de Minas e Energia] about prices going up.”
He disagreed with the fuel price stabilization fund that the company’s future president, Adriano Pires, had proposed during a recent interview. “It is an administrative problem, since the money is administered by the government. The resources often do not go to the destination, serious problems arise. They are palliative problems that do not solve.”
What was right, he says, was that the country had carried out fiscal reforms in order to be able to provide a temporary subsidy. “But we spend billions on tax credits on rapporteur amendments. Congress misallocates our resources.”
“For poor people, that the government, and not Petrobras, make a program in the style of gas aid. But not with the company’s resources, not finance with the resources of the dividends. Why not take money from the rapporteur’s amendments, from the electoral fund to subsidize the poorest?”, he asked.
Regarding the pressures that should fall on the company’s new president, Castello Branco said that no one is shielded. “The President of the Republic arrives and changes everything (…) the only question is the political cost.”
Castello Branco also defined Bolsonaro as “a humble person, really little endowed with knowledge”, but willing to recognize these limitations. “He delegated to Paul [Guedes] various ministries, but gradually, throughout 2019, populism emerged.”
He also assessed that the president should not get support from most market players again this year, as he did in 2018, and that Faria Lima has already been penalizing Petrobras shares for some time.
The former president of the company started the program saying that Petrobras has had two presidents, on average, per year, which sends bad signals to the market and society.
“Although some deserve it, presidents are fired for political circumstances and we have three fired for fuel prices: Pedro Parente, myself and now General [Silva e Luna]”, he said.
When mentioning the current moment, of pressure on fuel prices, which intensified with the war in Ukraine, he said that the ease of interference by the government in the company puts Petrobras in a constant impasse.
“These are bad signs, of pressure to interfere in prices. Petrobras is a mixed capital company. This is an unsustainable situation in which it has to serve two masters: the government and private shareholders.”
The crisis in the company happens while the consumer has felt in the pocket the increases in the gas stations. In almost a year of Silva e Luna’s administration, gasoline prices rose 27% and diesel prices, 47%. The gas cylinder rose 27% and the CNG (vehicle gas), 44%.
Due to the effects of the conflict in Eastern Europe and pressure from the president, who is expected to seek re-election this year and fears the effects of the rise in fuel prices on his popularity, the company has come to hold back the transfer of high oil prices for almost two months.
Asked about the international price parity policy being criticized by both President Bolsonaro and former President Lula (PT), who leads the polls, Castello Branco defended the oil company’s current policy.
“All attempts to escape the rule of market prices resulted in disaster. The losses from 2011 to 2014 were reflected in terms of revenue, Petrobras had to reduce its investments in oil fields to a minimum”, said the former president .
For Castello Branco, it is not up to Petrobras to make public policy. The former president of the company also said that Petrobras has the choice of letting economic rationality prevail or giving in and losing money.
On Monday, he also defended the privatization of the oil company again during his participation in Roda Viva.
For the former president of the state-owned company, Petrobras has two groups that think they own the company: unionists and the president of the Republic, who defend their personal and political interests — which are not beneficial to the company.
“That’s why I defend the privatization of Petrobras (…) One of the things I tried to do was to end up with monopolies — in gas, in refining.”​
In his view, President Jair Bolsonaro is not serious when he mentions a privatization of Petrobras. “Brazil has many sacred cows. I don’t see a real willingness to privatize Petrobras.”
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