Frictions between Petrobras and the government should continue, but Pires can build an alternative, say interlocutors

Fuel market executives and people close to economist Adriano Pires, appointed by the government to be president of Petrobras, say that he should follow the company’s pricing policy, even advocating periodic and small-interval readjustments.

The transfers from the escalation of oil to the consumer cause friction with the Palácio do Planalto. Amid the pressures, the current president, Joaquim Silva e Luna, tried to hold back as much as possible the increase in oil costs for the pumps and, when he did, he did not fully mark down prices.

According to Pires’ interlocutors, to make the transfers, the new president of Petrobras will work for the approval of a private fund that, probably, will be supplied with resources from dividends and royalties from Petrobras.

The other possible source to supply this fund would be more tax waivers – something that compromises the Union Budget – or the creation of a new tax.

All these measures generate discomfort in the team of Minister Paulo Guedes (Economy), who has already manifested himself on different occasions against the creation of a fund or the use of subsidies to contain prices.

Institutional investors and large investment funds heard by the sheet assess that frictions with the government tend to be repeated with Pires in charge.

However, they believe that Pires’ proximity to Congress will pave the way for a plan B – the creation of some compensation mechanism whenever oil is too high.

This would make the transfers to be maintained without a more forceful intervention in the oil company. Calculations made by sheet based on data from the ANP (National Petroleum Agency) and Petrobras itself, indicate that the company failed to earn at least R$ 17 billion with this policy in the year to February.

With extensive experience in the oil, gas and energy market, Pires would have the political and technical conditions to be able to articulate an exit that does not mean using Petrobras’ cash to make populism with the price of fuel.

The increase in fuel costs is one of the government’s biggest concerns, as the increasingly higher readjustments are interpreted as a risk to the president’s reelection, and has generated pressure within the government itself for a solution to soften the price for the final consumer. .

A Datafolha survey released this week shows that, for most Brazilians (68%), the Bolsonaro government is responsible for the rise in fuel prices.

The possible moves of the new executive have been followed by the market since his appointment, which was not made by Guedes or by the Minister of Mines and Energy, Bento Albuquerque. He was ratified by the Chief Minister of the Civil House, Ciro Nogueira (PP-PI), and by the President of the Chamber, Arthur Lira (PP-AL), chiefs of Progressistas, one of the government’s support bases.

Pires has always maintained dialogue with parliamentarians as director of the CBIE (Brazilian Center for Infrastructure) in the discussion and, in some cases, even in the structuring of bills, as a consultant.

This Tuesday, Guedes proved distant from the nomination process of the new president. The situation is quite different from that observed at the beginning of the government, when the minister actively participated in the choice of who would run the company – at the time, economist Roberto Castello Branco, a liberal who also graduated from the University of Chicago (USA).

On a trip to Paris, France, to attend OECD (Organization for Cooperation and Development) meetings, the head of the economic team told interlocutors heard by the sheet who was approached by members of the government to give approval to Pires’ nomination for the command of Petrobras, but preferred not to comment.

According to Guedes, the only appointment he made for the oil company was Castello Branco, even before Bento Albuquerque was confirmed as Minister of Mines and Energy (during the transition of government, in 2018).

Castello Branco was also sent away under government attacks. Guedes could not avoid the executive’s fall and remained in office, which led to a distance between the two.

This Monday (28), Castello Branco was interviewed on TV Cultura’s Roda Vida program and stated that Guedes is an excellent economist, but that he chose a different path from his.

“It’s a matter of his personal preference, not lack of knowledge. On the contrary, he is an excellent economist. But his behavior and preferences are different from me,” said Castello Branco. “He chose one path and I chose another,” he added.

When it comes to the new president, Guedes has been questioned by interlocutors about the policies defended by Pires, such as the fuel subsidy.

Guedes, however, prefers not to get into the topic and points out that the oil company’s presidential nominee defends the privatization of the company – something in line with the minister’s liberal agenda, who always wanted to sell Petrobras.