Angered by rising fuel prices, Jair Bolsonaro changes energy minister

Angered by rising fuel prices, Jair Bolsonaro changes energy minister

The President of Brazil, Jair Bolsonaroreplaced his mines and energy minister, Bento Albuquerque, days after publicly criticizing him for leaving the state oil company Petrobras announced a further increase in diesel prices.

According to a decree published this Wednesday in the Official Gazette and which had not been announced before, the far-right leader replaced Albuquerque, an admiral in the Navy and who He was one of his main confidantsby economist Adolfo Sachsida.

Despite the fact that the decree claims that the replacement was made at the request of the outgoing minister, the surprising cabinet change took place just six days after the head of state launched harsh and public criticism his minister and the president of Petrobras, José Mauro Coelho, for the continuous adjustments of fuel prices.

the escalation of inflation

Petrobras, which has a price parity policy under which it revises the international price of crude oil in the Brazilian market, announced this week a further increase diesel, the main fuel used by trucks in Brazil, in an adjustment that could put even more pressure on growth inflation which reached 12.13% in 12 months, largest since 2003according to data released on Wednesday.

Food prices trigger inflation in Brazil. Photo: AFP

Brazilian inflation stood at 1.06% in April, the highest rate for that month since 1996, reports this Wednesday the statistical institute IBGE.

Food and beverages were the category with the greatest weight in the indicator last month, with a lead of 2.06%, detailed the IBGE in a press release. In particular, self-consumption products are progressing, such as long-life milk (10.31%).

It was followed by transport, with an increase of 1.91%, influenced precisely by the increase in fuels (3.20%).

Retail price data for April is a far cry from the 0.31% recorded in the same month of 2021.

Gasoline prices at a gas station in San Pablo on Wednesday.  Photo: EFE Gasoline prices at a gas station in San Pablo on Wednesday. Photo: EFE

Bolsonaro furious

“You, Minister Bento Albuquerque and Mr. José Coelho, of Petrobras, cannot raise the price of diesel. I am not begging. I am transmitting a statement taking into account the abusive profit you have obtained,” Bolsonaro said in a broadcast. live on evoking the record net profit announced the same day by the national oil company.

“You can’t put Brazil out of business. Now this is a request: Petrobras doesn’t put Brazil out of business. Don’t raise fuel prices. I can’t intervene (in the company), but you have a great profit and you have defined the social role of Petrobras in the Constitution”, added the president.

Bolsonaro, who aspires to be re-elected next October but appears in second place in the polls far behind the favorite, the former president Luiz Inacio Lula da Silva vehemently called Petrobras’ profits a “violation” that only benefits foreign investors.

Although controlled by the state, Petrobras has shares traded on the São Paulo, New York and Madrid stock exchanges, and rules that prevent direct state intervention.

record profits

The oil company announced last week that it had obtained in the first quarter a profit of 44,561 million reais (about $8,912.2 million)3,718% higher than in the first three months of 2021 and the highest value for the period in its history.

Five days later, the state company announced an 8.87% increase in diesel, which economists say will have a strong impact on inflation in Brazil in the coming months.

Sachsida, now at the head of Mines and Energy, was an adviser and confidant to Economy Minister Paulo Guedes.

“I thank the President for his confidence, Minister Guedes for his support and Minister Bento for his work for the country. With a lot of work and dedication, I hope to be up to this challenge, which is the greatest professional challenge of my With the grace of God we will help Brazil,” he said in a message posted on Twitter.

Sachsida is a doctor in economics and a lawyer and has published technical articles on economic, monetary and fiscal policy. He has been a professor at various universities, including the Catholic University of Brasilia, where he is director of the Master’s in Economics. He was also a professor at the University of Texas (USA).

Despite Bolsonaro’s criticism, the new minister has made statements in which defends Petrobras’ price parity policy.

“If I announce measures that raise fears of fiscal consolidation, the country risk increases, the real depreciates and fuels increase. It starts with a measure to reduce the price of fuels, but it is wrong. This will have the result reverse,” he said. claims.

Prior to the replacement of Albuquerque, who had been in cabinet since Bolsonaro took office in January 2019, the president had already promoted two changes to the chairmanship of Petrobras, also due to his dissatisfaction with continued increases in fuel prices. .

The change to Mines and Energy came just a month and a half after the head of state replaced nine ministers who had to leave because they had aspirations to presidential, legislative and regional elections in October.

The changes occurred in the ministries of agriculture; Infrastructure; Work; Tourism; Citizenship; women, family and human rights; Regional development; Secretary of Government, and of Science and Technology.

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