Petrobras director says Brazil needs subsidies

(Bloomberg) — Subsidies are the only way to ease fuel cost pressures on consumers in Brazil because Petróleo Brasileiro SA must continue to follow international prices, according to one of the national oil giant’s board members.

Marcelo Gasparino, who represents the company’s minority shareholders in the oil giant, says the government should create a specific subsidy for road carriers, urban mass transit services, as well as taxis and rideshare drivers. It’s a move similar to what former President Michel Temer did in 2018 to appease striking truckers who wreaked havoc on the economy.

«The solution is not simple, but it is in the hands of the federal and state governments,» Gasparino said in an interview.

While there has been mounting pressure for the government to come up with subsidies as inflation tops 12% with just five months to go before the general election, the economic team has struggled with both fiscal and electoral constraints in providing the aid, people familiar with the matter said. the topic.

The possibility of the government backing the bill may become even more remote after President Jair Bolsonaro replaced Energy Minister Bento Albuquerque on Wednesday. While Albuquerque insisted that Petrobras could not keep fuel prices stable unless there were subsidies, his replacement Adolfo Sachsida is against such aid. For members of the Brazilian economic team, of which Sachsida had been a part since 2019, the national oil giant could be more socially sensitive when it comes to passing on increases in oil prices to consumers.

Gasparino, who has been a member of the company’s board since 2021, also argues that state governments should review local taxes known as ICMS, although he admits that is unlikely due to the upcoming elections.

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Petrobras Board Member Says Brazil Needs Fuel Subsidies

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