RIO DE JANEIRO, BRAZIL – Brazil’s conservative President Jair Bolsonaro criticized the profit published by Petrobras on Thursday (5), saying that the state-owned company could no longer raise fuel prices because it would “break Brazil.” The statement was made during the weekly live broadcast.
“Petrobras, we are at war! Don’t raise fuel prices any further! Your profit is like rape, it’s absurd,” Bolsonaro said.
Petrobras recorded a profit of R$44.5 billion (US$8.5 billion) in the first quarter of 2022. This figure was 3,718% higher than in the same period in 2021. At the same time, more than 50% of Brazilian households have descended into poverty due in part to unsustainably high fuel prices.
The president said he did his part, but he was not responsible for the company. He also criticized former leftist governments for their intervention in fuel prices and for “other actions aimed at corruption.”
According to the Bolsonaro, Petrobras’ profits are even higher in the “crisis,” reaching 30%, double those of international oil companies.
He claims that the state-owned company “does not understand or does not want to understand” that another increase could cause “national upheavals.”
The president classified the possible increase in the price of diesel in the country as a “crime” and that the people are footing the bill for the profits of the state-owned company.
He referred to the impact of the war in Ukraine on the Brazilian economy, saying that “people have lost their purchasing power,” and recalled that the salary of the company’s president is seven times his own, at R$33,000.
A survey conducted by the Brazilian Institute of Geography and Statistics (IBGE) in April shows that the purchasing power of the Brazilian Real fell by 30% in the last five years. Added to that, the average income of Brazilians fell 8%.
A PoderData poll conducted April 24-26, 2022, shows that 67% of the Brazilian population supports government intervention at Petrobras to lower the price of gasoline, which keeps breaking records in the country.
PETROBRAS
Chemist José Mauro Coelho took office as president of Petrobras on April 14, 2022. He defended the current pricing policy, which is equivalent to the price of a barrel of oil abroad, saying that the increase in oil and gas production was only possible thanks to this new policy.
Coelho replaced Joaquim Silva e Luna, who was fired by Bolsonaro in March, just days after Petrobras raised the price of diesel by almost 25% and gasoline by almost 19% at its refineries. The president has repeatedly blamed the company for the fuel price hikes.
In his speech, Coelho recalled the company’s last executives and said that Petrobras’ gross debt in 2014 was US$160 billion: “One of the largest in the corporate world.” With the state-owned company’s new policies, he said, debt has fallen to less than US$60 billion, creating room for new investments.
“In 2021 alone, US$8.8 billion was invested. Petrobras is now the largest oil and natural gas producer in Brazil. Daily production is about 2.2 million barrels of oil or 72% of national production. And we have a gross natural gas production of 98 million cubic meters per day, 73% of Brazilian production,” he said.
SELFISH PETROBRAS
While countries such as El Salvador freeze fuel prices and Paraguay offsets fuel prices through taxes, rich Petrobras, one of the largest oil companies in Latin America, thinks only of its profits and leaves Brazilian households out in the cold.
Gasoline price reached a record high in the country at R$7.27 (US$1.45) per liter, or US$5.50 per gallon. GDP per capita in Brazil is about nine times lower than in the U.S., and the Purchasing Power Index is about one-third that of the U.S.
Simply put, the cost of fuel is actually hurting Brazilians as much as if Americans had to pay a price of at least US$16.50 per gallon. Think about that for a moment. Americans are now at about US$5 per gallon and are screaming in anger.
The NTU (National Association of Urban Transportation Companies) released a note warning that there will be a shortage of transportation in large cities if diesel fuel rises again – which may be announced by Petrobras in the coming days.
That is part of the reason why only 33% of Brazilians want to privatize Petrobras; 50% are against it. A PoderData poll conducted April 24-26 shows that half of the Brazilian population (50%) believes the government should continue to own Petrobras. Only 33% believe that the state-owned company should be sold.
Considering that this company only has profits in mind while it is still controlled by the state, one can imagine how it will behave when it is privatized.
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