BRASILIA, (Reuters) – Brazilian President Jair Bolsonaro criticized stiff price hikes for gasoline and diesel by state-controlled oil company Petrobras PETR4.SA yesterday, saying the firm had reported an “absurd” amount of profit.
He said, however, he would not interfere in the pricing policy of the company, formally known as Petroleo Brasileiro SA.
Petrobras on Thursday said it was raising gasoline prices at the refinery gate by 18.8% and diesel prices by 24.9% as world oil prices soar due to the war in Ukraine, causing lines at gas stations by Brazilians hurrying to fill up.
Worried about the impact of fuel prices on inflation and his chances of re-election in October, Bolsonaro on Friday promptly signed into law a bill aimed at curbing fuel price hikes by simplifying the way the ICMS state tax is collected.
The bill was passed by the Senate on Thursday and the lower chamber on Friday. Another bill passed by Congress sets an acceptable range for fuel prices and provides for the government to step in to compensate actors in the fuel distribution market if international prices exceed those levels.
The bills are a positive move for Petrobras but will add to the burden of the government’s stretched finances.
“It is an absurd profit that Petrobras has at an atypical moment in the world,” Bolsonaro told reporters on Saturday, adding: “I am not satisfied with the price readjustment, but I will not interfere in the market.”
Last week, Bolsonaro complained that Petrobras was too profitable and it should make a sacrifice to keep down prices. The company’s chairman resigned a few days later.
Asked on Saturday about the possibility of establishing a subsidy for fuel prices, Bolsonaro said that was up to Economy Minister Paulo Guedes, who has opposed subsidizing fuel due to the fiscal cost.
Bolsonaro, in campaign mode, spoke to reporters after an event of the conservative Liberal Party (PL) which he joined in November to run in the October election. The PL party said Bolsonaro will launch his re-election bid on March 26.
New polls published this week showed that his main rival, former leftist President Luis Inacio Lula da Silva, maintains a comfortable 15% advantage, but Bolsonaro has managed to narrow down that lead by two points in recent weeks.
