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Jair Bolsonaro Complained About Petrobras’ High Natural Gas Prices and Stated That the Federal Government Will Fight to Change This
Roberto Castello Branco heard once again from Jair Bolsonaro about Petrobras’ natural gas prices. The Federal Government stated it will take the necessary measures to change the current situation.
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“It’s unacceptable to announce, the old president again, a 39% increase in gas. Unacceptable. What contracts are these? What agreements were made? Were they made with Brazil in mind?” questioned Jair Bolsonaro. “I will not interfere. The press will say otherwise. But we can change this pricing policy there [at Petrobras],” he concluded.
Former Petrobras President Increases Natural Gas by 39% and Federal Government Responds
The former Petrobras president (already dismissed) authorized the new increase in natural gas, and the current president of the republic classified such action as unacceptable and reports that he is working to implement changes in the State Company.
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The next few hours will be marked by increasing tension regarding the stance to be adopted by the Central Bank’s Monetary Policy Committee (Copom/BC) concerning the benchmark interest rate (Selic) at the end of this Wednesday’s (17th) meeting. Although the market is ‘divided’ on the committee’s decision, the stronger trend in recent weeks is that the rate will remain unchanged at the current level of 14.50% per year. Meanwhile, a minority faction still ‘bets’ on a 0.25 percentage point (p.p) decrease.
“What we want is transparency. You need to know how much the federal government collects in taxes on each fuel and how much the governors collect on the same fuels,” stated the president. The submitted project is expected to be discussed in the next 15 days.
“It cannot happen that every time the price of fuel decreases, at the pump, in the end, it [the price] does not go down. This cannot happen. I am sure you [addressing the deputies present at the event] will vote for this proposal. Let there be an agreement. That it is not uniform for fuels throughout Brazil, but that it is a fixed amount in each state and each governor is responsible, along with the president, for the tax amount charged on each item,” concluded Jair Bolsonaro.
Petrobras’ Natural Gas Increase Even Affects the USA
The state company announced on Monday that the selling prices of natural gas to merchants will increase by 39% in reais per m3 starting May 1 compared to the previous quarter.
In US dollars per million Btu ($/MMBtu), the increase will be 32%. It should be noted that, in mid-February, Bolsonaro dismissed Roberto Castello Branco, CEO of Petrobras, for considering the fuel price increases excessive.
At the gas station, General Joaquim Silva e Luna expressed his views, who was dismissed from the command of Itaipu Binacional this Wednesday. Furthermore, up to this moment, he has still not been approved by the state shareholders for the board of directors to be elected president of the company.
Clarification from Petrobras
Petrobras clarifies that the final price of natural gas to the consumer is determined not only by the sale price of the company but also by the margins of the distributor (and, in the case of vehicular natural gas, by the resale stations) and by federal and state taxes, one of the reasons for the current president of the republic’s Jair Bolsonaro criticism.
Moreover, the rate approval process is carried out by state regulatory agencies, according to specific legislation and regulation.
Investors rejected Bolsonaro’s latest statements regarding the functioning of Brazil’s largest company, pushing its preferred and common shares down by 1.7% and 1.9%, respectively, at the start of trading on Thursday. At 11:10 AM local time, they were two of the three worst-performing stocks on the broader Bovespa index, which rose by 0.1%.
Comments from Jair Bolsonaro on Wednesday helped erase gains in Petrobras’ preferred and common shares, and they closed the session virtually unchanged. Preferred shares closed down by 0.08%. Selling continued on Thursday.
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