Brazil: Bolsonaro fires third state oil company head in a year due to high gas prices

Brazil’s Ministry of Mines and Energy announced on Monday that it will sack Jose Mauro Ferreira Coelho, head of state oil company Petrobras, after 40 days in office.

Coelho became the third person appointed to head Petrobras last year. Petrobras executives are openly at war with conservative President Jair Bolsonaro over rising fuel prices in the country due to inflation and growing deficits. Bolsonaro has regularly complained to the public that Petrobras’ fuel prices are too burdensome for the Brazilian people and unreasonable due to excessive corporate profits.

But Bolsonaro refused to use government power to enforce price control and merely lowered prices on his own, saying it would hurt Petrobras’ finances, and describing previous socialist administrations Dilma Rousseff and Luiz Inacio Lula da Silva as de facto reduced prices. Gas prices by the government as evidence of government intervention causing unnecessary economic problems. Lula, who founded and currently leads the country’s Socialist Workers Party (PT), is currently leading Bolsonaro in the 2022 presidential election.

Under Lula, politicians across the country embarked on a massive corruption scheme now known as Operation Car Wash, in which the government paid private companies for infrastructure projects and then bribed individual politicians with some of the excess revenue. Petrobras, a private company technically controlled by the Brazilian government, is a critical part of the plan.

Lula was sentenced to 25 years in prison in 2019 for illegal profits from Operation Car Wash, but Brazil’s highest court, the Supreme Federal Court (STF), quashed the sentence, allowing him to run for president again. Although Rousseff was Minister of Mines and Energy under Lula and was directly responsible for relations with Petrobras, he was not involved in Operation Car Wash.

The ministry announced on Monday that Petrobras has decided to use its powers as the majority shareholder to impeach Coelho, now a former president, without specifying why he lost.

“The government expresses its gratitude to President José Mauro for the results achieved during his tenure at Petrobras. Brazil is currently experiencing difficult times due to the extreme volatility of hydrocarbons in international markets.” Also, several well-known geopolitical factors affect not only gasoline and diesel prices, but all It also affects the energy components.”

The aforementioned “geopolitical factor” appears to be an international rise in gasoline and other fuel prices in connection with Russia’s invasion of Ukraine, resulting in a boycott of Russia’s oil and gas, resulting in a significant drop in supplies and higher prices. led to . Fuel prices have also dropped significantly after the Chinese coronavirus pandemic, which has kept millions of people at home, and are starting to rise as workers return to normal travel around the world.

Noting that the government will appoint Cayo Mario Paez de Andrade to replace Coelho, the statement said, “Working and promoting a balanced scenario in the energy sector is crucial to creating corporate value that benefits society as a whole.” Said. The ministry added that Paez de Andrade will take the Harvard and Duke pedigree into position. Páez de Andrade is currently working on “debureaucratization” for the Brazilian Ministry of Economy.

The company must approve Paez de Andrade as the new president.

Coelho only lasted 40 days as president of Petrobras. Bolsonaro’s administration replaced its predecessor, Joaquim Silva y Luna, in April after Bolsonaro repeatedly criticized the company for calling it huge profits, particularly due to the economic hardship of middle-class and poor Brazilians. . Petrobras raised fuel prices in March, blaming the Ukrainian-Russian war, shortly before the government ousted Silva y Luna from the presidency.

Shortly after, Bolsonaro used a live Facebook feed to accuse Petrobras of “raping” the wallets of Brazilian citizens.

People are begging Petrobras not to fix the gas price. You get ridiculous income,” Bolsonaro said in early May. “He [Petrobras] must have a social duty. Petrobras, we are at war. Petrobras, don’t raise the price of fuel. Your gain is rape, it’s bullshit,” he said.

“Many oil companies in the world have lowered prices, lowered their companies’ profits. For what? To help your country not be destroyed,” Bolsonaro continued. “Brazil could break if there is still a price increase. And Petrobras employees don’t understand or don’t want to understand or just want to make money. ”

Bolsonaro stressed that he would not use government price controls to crush Petrobras, accusing Lula and Rousseff of doing so during their presidency.

“This resulted in Petrobras passing over $900 billion. [reais, $178 billion] to make changes in fuel prices, among other acts of corruption. There is no interference,” Bolsonaro said. “On the other hand, Petrobras’ revenues increased due to the crisis. This is an unacceptable crime,” he said.

Petrobras reported first-quarter revenue of R$44.56 billion ($8.86 billion) on the same day Bolsonaro went into operation, slightly higher than Bolsonaro’s forecast.

This week, Bolsonaro reposted a video on social media in which he continues to voice his concerns about fuel prices in the country – this time accusing Petrobras of corruption in the far-left government in Bolivia and Argentina.

pic.twitter.com/MQbVXAvLfR

– Jair M. Bolsonaro (@jairbolsonaro) 23 May 2022

Bolivia cut off 30 percent of our gas to go to Argentina. How has Petrobras handled this? Everything seems staged,” Bolsonaro said. “Gas that you have to buy elsewhere costs five times as much. Who will pay the bill? And who is responsible?

“We,” the installer replied.

“This business seems organized. You know exactly who it is to benefit,” Bolsonaro said, without giving details, perhaps referring to his election rival, Lula.

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