Shares of Brazil’s state-owned oil giant Petrobras are up almost 1 percent today, going in the opposite direction of overall domestic markets, with investors spooked by economic and political uncertainty. The hike in Petrobras share prices follows comments made by President Jair Bolsonaro, saying that he would be willing to privatize the company — a long-held dream of market agents.
During a radio interview, Mr. Bolsonaro demonstrated his frustration about not being able to interfere with Petrobras’s pricing policy — currently pegged to international oil rates. “It’s too easy to say: fuels are up, it’s Bolsonaro’s fault,” he complained. “I want to privatize Petrobras […] Gas and fuel prices go up and suddenly it’s my fault.”
Technically, Petrobras is a government-controlled private company, and the interests of its minority shareholders often clash with those of the government. For decades, privatization was seen as a possible solution to improve the company’s competitiveness and avoid interference with its management. Now, Mr. Bolsonaro seems to see privatization as a way to avoid losing popularity due to ballooning inflation.
Brazilians are paying much more to fill up their tanks — and fuel inflation has taken center stage in political debates. For weeks, House Speaker Arthur Lira has complained about Petrobras not fulfilling its social role by keeping rates pegged to international prices.
On Wednesday, he led a push to alter how state-level taxes on goods and services are levied on fuels — which he claims could drop fuel prices by up to 8 percent.
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