Insider

Supreme Court justice orders Petrobras to explain fuel price hikes

supreme court justice petrobras
Supreme Court Justice André Mendonça. Photo: STF/Flickr

Supreme Court Justice André Mendonça gave Brazil’s oil and gas giant Petrobras five days to present “detailed information” on the criteria it uses to adjust fuel prices sold at refineries. 

On Friday, the company announced gasoline and diesel prices would rise by 5 and 14.2 percent, respectively.

Since 2016, Petrobras has pegged its prices to international oil rates. But in his ruling, Justice Mendonça said Petrobras must abide by the constitutional principles of transparency — as the government is the company’s controlling shareholder.

President Jair Bolsonaro appointed Justice Mendonça to the Supreme Court last year, and his rulings have systematically sided with the administration’s interests. That alignment led observers to see the ruling as yet another intervention attempt by the government, this time through the Judiciary.

Another front is being fought in the Legislative branch. On Friday, House Speaker Arthur Lira — who is also allied with the government — urged Petrobras CEO José Mauro Coelho to resign immediately. He suggested Congress should pass legislation to double taxation over the company’s profits. On Twitter, Mr. Lira said Petrobras has declared war on the Brazilian people.

Fuel prices have corroded households’ purchasing power. A standard 50-liter tank of gasoline costs roughly one-third of the monthly minimum wage. With an electoral campaign in three and a half months, President Jair Bolsonaro is trying to force Petrobras to freeze prices. 

Investors are growing wary of political pressures over the oil giant. By 1 pm on Friday, the company’s share prices were crashing nearly 9 percent.