Bolsonaro speeds up Petrobras privatization and exposes Brazil to fuel increases

On Monday, October 3, Petrobras completed 69 years amid a process of dismantling, according to a survey by the Intersyndicate Department of Statistics and Socioeconomic Studies (Dieese).

This dismantling is caused by serial sales of part of the company’s assets, which were intensified during the government of President Jair Bolsonaro (Liberal Party – PL).

The organ raised that from 2013 to August 2022 (nine years), Petrobras sold 94 assets (80 in Brazil and 14 abroad), totaling US$59.8 billion.

Only during Bolsonaro’s government, between January 2019 and August this year, 63 assets were sold, 67% of the total, worth US$33.9 billion.

In the Bolsonaro administration, BR Distribuidora, oil fields, terminals, gas pipelines, thermoelectric plants, wind power plants, and other assets were sold.

RLAM PRIVATIZED

Petrobras sold during the Bolsonaro administration the Landulpho Alves Refinery (RLAM), in Bahia, for example.

The plant that produces gasoline, diesel, and other oil derivatives was transferred to the Mubadala Capital fund in December last year in exchange for US$1.65 billion.

According to the Institute for Strategic Studies of Petroleum, Natural Gas, and Biofuels (Ineep), the refinery was worth at least twice that.

RLAM was valued at US$3.92 billion in scenarios drawn up by the institution.

This calculation was the basis for a complaint made by the Single Petrol Workers Federation (FUP) to the Federal Audit Court (TCU). The case, however, was shelved by the court.

With possession of RLAM, Mubadala founded Acelen. The company became responsible for the refinery and selling the fuel produced there.

Acelen made successive readjustments in gasoline and diesel prices. Because of this, in March 2022, Bahia was the state with the most expensive fuel in the country.

According to the FUP’s general coordinator, Deyvid Bacelar, Petrobras’ sales are made for “banana” prices and still harm the population, which, in the last instance, is the owner of the state-owned company.

“We see Petrobras reaching 69 years dismantled, investing less, leaving aside renewable sources, and maintaining the import parity price policy (PPI), which harms Brazilians with high prices and inflation but ensures large gains to its shareholders, including a good portion of foreigners,” he said.

MORE SALES

At this moment, four Petrobras refineries are for sale:

• Abreu e Lima Refinery (Rnest) in Pernambuco;
• Gabriel Passos Refinery (Regap) in Minas Gerais;
• Presidente Getúlio Vargas Refinery (Repar), in Paraná;
• Alberto Paqualini Refinery (Refap), in Rio Grande do Sul.

The process of selling Rnest, Regap, and Refap was reopened in July, months before the presidential election.

Bolsonaro, by the way, has already signaled that he intends to maintain the policy of selling Petrobras assets if he is reelected.

His Minister of Economy, Paulo Guedes, has already started studies to privatize Petrobras as a whole.

This sale would not be immediate. It would depend, therefore, on an eventual second mandate of Bolsonaro.

Former President Luiz Inácio Lula da Silva (Workers’ Party – PT), in turn, is against the privatization of Petrobras.

The most voted candidate during the first round of the election, with 48.4% of the valid votes, Lula da Silva argues that Petrobras should be used to increase investments in Brazil.

MORE INCREASES

In Bolsonaro’s government, gasoline reached an accumulated increase of 69%, according to data from the National Petroleum Agency (ANP) tabulated by the Social Oil Observatory (OSP).

The increase was recorded between January 2019 and July this year, before the tax cut on fuel defined by Congress.

In almost 13 years of PT governments, the same fuel rose 72%

The increase was registered between January 2003 – when da Silva took office – and May 2016 – the month in which former President Dilma Rousseff (PT) was removed due to the impeachment process.

In the case of diesel oil, in more than 13 years of PT governments, there was an increase of almost 98%. In three and a half years of Bolsonaro’s government, the increase was 100%.

With information from Brasil de Fato

For the full picture, see our Brazil Tax Reform: Complete Guide.