Brazilian government discusses ways to reign in defiant state-owned Petrobras

RIO DE JANEIRO, BRAZIL – Latin America’s largest oil company, Petrobras, is majority-owned by the Brazilian state but regularly defies the explicit wishes of its majority shareholder regarding fuel pricing.

That is why the Planalto Palace is focused this Tuesday (21) on finding ways to amend the law on state-owned companies, which is at the center of the problem.

The text of the law, which took effect in 2016 after Operation Lava Jato, stipulates that public companies be managed according to governance criteria. They must have bylaws, an independent board of directors, and policies in line with market conditions.

The head of the government in the Chamber of Deputies, Rep. Ricardo Barros (PP-PR), told Poder360 that the leaders of the executive branch had proposed a provisional measure for the amendment, but there was no green light yet.

Poder360 found out that alternatives other than a provisional measure are being sought for this Tuesday.

According to reports, there is a divergence between the political and economic wings of the government. While Civil Minister Ciro Nogueira defends the provisional measure to amend the law, Economy Minister Paulo Guedes is against it. The Planalto is trying to reach a consensus.

The existing state law states that the Union can guide companies to contribute to its social function. However, there is no consensus on whether the state’s social function allows intervention in fuel prices.

Petrobras President José Mauro Ferreira Coelho resigned Monday (20) from his post and seat on the company’s board of directors. The announcement came after the state-owned company readjusted prices for diesel and gasoline, sparking a storm of outrage.

With the departure, President Jair Bolsonaro (PL) will have appointed the fourth CEO of the state-owned company. José Mauro Coelho remained in the post for one month and nine days.

On Friday (17), the state-owned company increased the price of gasoline sold to dealers by 5.18% and diesel by 14.26%.

With information from Poder360