Petroleo Brasileiro SA’s market-based diesel pricing policy remains unchanged and Brazil’s president has no intention of meddling in Petrobras’ internal affairs, high-ranking government officials said on Tuesday.
A call by President Jair Bolsonaro last week to the chief executive of Petrobras led the state-run company to call off a sharp diesel price increase and revived investor fears about political influence, hammering the share price of Petrobras.
The episode underscored the leverage of truckers in Brazil, which relies overwhelmingly on road freight to get agricultural exports to port and keep its economy humming. It left investors doubting the liberal bona fides of Bolsonaro’s government, which has decried state interventionism under some of its predecessors.
After a meeting of high-ranking officials in Brasilia on Tuesday, the government sought to portray the Friday incident as a one-time event and said Petrobras can choose when and how to adjust fuel prices, which had not been the practice under previous governments.
“I cannot and I will not interfere in Petrobras,” Bolsonaro said in a written statement, read aloud by presidential spokesman Otavio Rego Barros.
Petrobras on Tuesday announced in a daily filing that it would not adjust the price of gasoline or diesel at refineries for Wednesday. It made the announcement shortly after the end of a news conference in Brasilia where government officials announced measures designed to avoid a threatened truckers’ strike.
In separate comments, Economy Minister Paulo Guedes acknowledged that Bolsonaro had been responding to political concerns when he called Petrobras’ chief executive, Roberto Castello Branco, last week. He said, however, that the government was now committed to full price autonomy at Petrobras.
The comments will come as a relief to investors. While his economic team is led by free-market advocates, Bolsonaro, who for years pressed for heavy state involvement in Brazil’s economy, is a newcomer to liberal economic ideas.
A truckers’ strike over high diesel prices last year paralyzed Brazil’s economy for weeks, led to the departure of the then-CEO at Petrobras and handicapped an already unpopular government.
Bolsonaro, who took power in January, was one of the most prominent politicians to throw his weight behind truckers’ complaints last year and has been sensitive to their demands.
At the news conference on Tuesday, the presidential chief of staff, Onyx Lorenzoni, and Infrastructure Minister Tarcisio Freitas pledged 500 million reais ($129 million) in loans from a state bank for independent truckers, as well as other measures designed to avoid a threatened strike. Lorenzoni and Freitas did not address the truckers’ underlying complaint about fuel prices.
Preferred shares of Petrobras closed up 3.05 percent, though the gains occurred largely before the government’s comments.
Reporting by Ricardo Brito; Writing and additional reporting by Gram Slattery; Editing by Dan Grebler and Tom Brown