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Brazil’s Bolsonaro says recent comments by Petrobras CEO will have consequences By Reuters

© Reuters. FILE PHOTO: A man walks past the headquarters of Brazilian oil company Petrobras in Rio de Janeiro

By Gram Slattery and Sabrina Valle

RIO DE JANEIRO (Reuters) – Recent comments by Petrobras Chief Executive Roberto Castello Branco regarding the possibility of a truckers’ strike will have consequences, Brazilian President Jair Bolsonaro said on Thursday, adding that “something will happen in the coming days.”

Bolsonaro did not further specify what measures he would take with respect to the state-controlled company, adding that there would be no political interference at Petroleo Brasileiro SA, as the firm is formally known.

In late January, Castello Branco said truckers threatening to strike due to what they perceived as high domestic diesel prices were not the company’s problem.

Petrobras has repeatedly said it sells fuels domestically in line with international prices.

But investors have been jittery about possible political interference at Petrobras for the last two weeks. Earlier in February, the company announced it was changing its fuel pricing policy to allow domestic prices to differ from international prices for longer periods of time than previously disclosed.

That prompted multiple analysts to downgrade their recommendation on Petrobras shares.

“As the head of Petrobras said a few days ago: ‘I don’t have anything to do with truckers.’ That’s what he said, the head of Petrobras. That’s going to have a consequence obviously,” Bolsonaro said during a live chat broadcast on multiple social media platforms.

He then added: “I don’t have anything to do with this.”

Petrobras declined to comment on Thursday evening.

During the broadcast, Bolsonaro also said he would eliminate federal taxes on diesel for two months starting on March 1, with the goal of permanently eliminating the tax.

Political interference with Petrobras’ fuel pricing policy has long been a concern for the market. In 2018, Petrobras’ then-chief executive resigned when Brasilia stepped in to artificially lower fuel prices in response to a crippling nationwide truckers’ strike.

Earlier on Thursday, Petrobras announced the highest fuel price increase since it modified its pricing policy. Analysts at UBS calculated in a note to clients that the hike represented a 10% increase in gasoline prices and a 15% increase in diesel.

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