Brazilian President Jair Bolsonaro has fired Petrobras president José Mauro Coelho after just 40 days in office amid relentless pressure over fuel price hikes. “The federal government, as the controlling shareholder of Petróleo Brasileño SA, Petrobras, advises that it has decided to promote the alteration of the company’s presidency,” reads a note from the Ministry of Mines and Energy. However, he did not offer details of Coelho’s dismissal.
“Brazil is currently experiencing a challenging moment, due to the effects of the extreme volatility of hydrocarbons in international markets,” the statement said. Coelho, the third president of Petrobras during the Bolsonaro administration, had been appointed in April for one year, completing the cycle of his predecessor Joaquim Silva e Luna. As the new president, the Government proposed Caio Mário Paes de Andrade, current Secretary of Debureaucratization of the Ministry of Economy, who still has to be approved by the company’s board of directors.
The two previous leaders of Petrobras, Silva e Luna and Roberto Castello Branco, were also fired after Bolsonaro criticized fuel price hikes by the company that controls the local market.
Andrade holds a bachelor’s degree in social communication from Paulista University, a postgraduate degree in administration and management from Harvard University, and an MBA from Duke University, the ministry said. “The nominee has all the qualifications to lead the Company to overcome the challenges imposed by the present situation (…) without neglecting Petrobras’ government, environmental and, especially, social responsibilities,” the company assures.
The constant increases in fuel prices, which particularly fuel inflation, worry Bolsonaro, who will seek re-election in the October elections.
Coelho assumed the leadership of Petrobras on April 14 and assured that there would be no changes in its price policy, which follows the international price of crude oil, triggered in recent months by the war between Russia and Ukraine. On May 11, Bolsonaro changed the Minister of Mines and Energy, Bento Albuquerque, after Petrobras implemented a new increase in diesel (8.8%). However, this portfolio does not have a direct impact on the decisions of the autonomous company.
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Petrobras reported a net profit of 44,561 million reais (8,605 million dollars) between January and March of this year, which is about 38 times what was obtained in the first quarter of 2021.
Economist André Perfeito, from the consultancy Necton, indicated in a note that, given Andrade’s profile, “it does not seem reasonable to assume that Petrobras’ pricing policy will change, quite the contrary” and assured that with this new change the ministry of Economy will have “more control than ever over the oil company.”
“Under the direction of the new Minister of Mines and Energy, Adolfo Sachsida, studies for the privatization of the company began and we should probably see the support of the new president in this regard,” added the analyst, who assures that the market will approve the change because “Andrade is a professional linked to liberal values and close to Minister Paulo Guedes.”
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