Jair Bolsonaro dismissed Petrobras president after recurrent increases in fuel prices

The president of Brazil, Jair Bolsonaro, decided on Monday to change the president of state-owned Petrobras, Joaquim Silva e Luna, under heavy pressure from the recurring increases in fuel prices.

The information, leaked by the Brazilian press, was confirmed in the evening by the Ministry of Mines and Energy, which proposed the economist Adriano Pires, with more than three decades in the energy sector, as the candidate to replace him.

The appointment must be approved by the Board of Directors of the state-owned company on April 13, the ministry reported.

The ministry also proposed businessman and engineer Rodolfo Landim, who worked in the state oil company for more than two decades, to chair the company's Board of Directors. Landim is president of Flamengo, the most popular football club in Brazil.

Bolsonaro had appointed Silva e Luna, a general of the Army reserve, in February of last year, also dissatisfied at the time with the constant price increases applied by the state company then chaired by the respected economist Roberto Castello Branco.

The president has long criticized the state company's price policy, which has set severe increases following the international price of crude oil, which has caused inflation, which is very detrimental to its popularity before seeking re-election in October.

In early March, Petrobras applied an 18.8% increase in the price of gasoline and 24.9% to that of diesel in the face of the “global increase in oil and oil products prices as a result of the war between Russia and Ukraine”.

Petrobras shares fell 2.63% at the close of the San Pablo Stock Exchange on Monday.

“It's not going to change much”

For economist Alex Agostini, from the consultancy firm Austin Rating, “those changes in the management of the company are not good. It's a sign that something is wrong.”

“But for the market it's not going to change much. If it is confirmed that the new president will be Adriano Pires, a specialist in the area of oil and gas, that will bring stability to the financial market,” because he will hardly intervene in Petrobras's pricing policy, Agostini told the AFP news agency.

PhD in Industrial Economics from Paris XIII University, he was, among other things, advisor to the Director General of the National Agency for Oil, Natural Gas and Biofuels and is founder and director of the Brazilian Center for Infrastructure (CBIE), a consulting firm specializing in energy.

Pires has been in favour of the pricing policy pursued by the state company.

In an interview with CNN Brazil following the increase in early March, he said that “there was no way Petrobras would not raise prices, because the price gap between the domestic and foreign markets was too big.”

“That difference was starting to cause a risk of shortages in Brazil. The country imports 30% of what is consumed in petroleum products. If the gap is too big, nobody matters and stocks were already running out,” he said.

Petrobras, whose majority shareholder is the state, closed 2021 with a record profit of 19,875 million dollars (R$106.668 million).

According to the latest survey by consultancy firm Datafolha in March, 75% of Brazilians believe that the government has “a lot” or “some” responsibility for inflation that affects the pocket of families.

The same poll indicates that the far-right president would lose in a possible second round to former leftist president Luiz Inácio Lula da Silva (2003-2010), by a difference of 21 points (55% to 34%).

(With information from AFP)

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