Bolsonaro dismisses Petrobras president after 40 days in office

RIO DE JANEIRO, BRAZIL – The Brazilian government announced Monday the replacement of José Mauro Ferreira Coelho, who held the presidency of state oil company Petrobras for 40 days and was the third in office during the current administration of President Jair Bolsonaro.

“Brazil is currently going through a difficult period due to the impact of extreme volatility of hydrocarbons in international markets,” the Ministry of Mines and Energy justified the change in a statement.

“Various geopolitical factors are known to affect the price of gasoline and diesel and all energy components,” the statement added.

To “maintain the necessary conditions for the growth of employment and income of Brazilians,” the ministry said, it is necessary to “strengthen the investment capacity of the private sector as a whole and work on a balanced scenario.

To replace Ferreira Coelho, the government proposed social communicator Caio Mario Paes de Andrade, advisor to Economy Minister Paulo Guedes, with a postgraduate degree in administration and management from Harvard and a master’s degree in business administration from Duke University in the United States.

Paes de Andrade’s name will be submitted to the company’s Board of Directors for final approval.

Prior to Ferreira Coelho, economist Roberto Castello Branco and reservist general Joaquim Silva e Luna served in the current administration.

On May 1, Bolsonaro also replaced his Minister of Mines and Energy, Admiral Bento Albuquerque, after publicly criticizing him a few days earlier for announcing a new increase in diesel prices by the oil company.

The surprise cabinet reshuffle came just six days after the head of state publicly criticized his then-minister and Ferreira Coelho for continuing to adjust fuel prices.

Petrobras, which follows a price parity policy in which it checks the international price of crude oil in the Brazilian market, this week announced a new increase in the price of diesel, the main fuel for trucks in Brazil. This adjustment could add to pressure on rising inflation, which is already approaching 12% year over year just months before the presidential election.

Although Petrobras is state-controlled, its shares trade on the São Paulo, New York, and Madrid stock exchanges, and there are rules to prevent direct government interference.

The oil company announced earlier this month that it made a profit of R$44.561 billion (about US$8.91 billion) in the first quarter. That’s a 3,718% increase over the first three months of 2021 and the highest profit in the company’s history.

Five days later, the state-owned company announced an 8.87% increase in diesel price, which economists say will significantly impact inflation in Brazil in the coming months.

Adolfo Sachsida, the new head of the Ministry of Mines and Energy, an advisor and confidant of Guedes, is now championing Bolsonaro’s intention to privatize the country’s largest company.