Markets have frequently shuddered at President Jair Bolsonaro’s multiple attempts to interfere with the pricing policy of Petrobras, Brazil’s oil and gas giant — in which the government has a controlling stake. In March, unhappy with the company’s policy of pegging its fuel prices to international levels, he pushed to change the company’s chief executive officer.
But from an electoral point of view, Mr. Bolsonaro’s moves make a lot of sense.
A PoderData poll shows that 67 percent of Brazilians support some kind of intervention to lower fuel prices, which have risen by 28 percent over the past 12 months.
Low-income voters are unsurprisingly more supportive of state intervention — as they are disproportionately hit harder by higher prices at the pump. Per PoderData, 77 percent of poor voters support price controls, against 58 percent among high-income voters.
Experts point out that there is room for further fuel price hikes. The association of fuel importers says diesel and gasoline are sold in Brazil at prices 27 and 11 percent below those in the Gulf of Mexico. And current Petrobras CEO José Mauro Coelho says he agrees with the pricing policy as it is.
Higher fuel prices also spill over into other products, as trucks account for the lion’s share of Brazil’s cargo transportation. In 2018, the rise in diesel prices led transportation companies and truckers to stage a strike that essentially halted the country for 11 days and had a massive negative impact on the economy.