Bolsonaro also called for the election of a new board of directors, according to a statement published near midnight local time on Monday by the state-controlled company, paving the way for a total management change. operating.
José Mauro Ferreira Coelho is the third Petrobras CEO to be fired by Bolsonaro over fuel prices. The president, who is seeking re-election in October but has lagged behind in the polls, said Petrobras should use its profits to lower fuel prices and help control inflation.
Bolsonaro, who also fired an energy minister earlier this year, appointed Caio Mario Paes de Andrade to replace Coelho.
The government controls Petroleo Brasileiro, as the company is officially known, with a majority of voting shares, even if private investors own more than 60% of the company.
Brazil is entering a crucial window to secure diesel supplies, and Petrobras management warned the government last week that pumps could run dry during the crucial soybean harvest season if the company doesn’t sell. fuel at market prices, according to four people close to the discussion and one insider. Presentation viewed by Reuters.
Petrobras says the company and other importers will struggle to secure diesel amid the worst fuel shortages in 14 years, sources said.
Analysts, private importers and officials with the oil regulator ANP echoed those concerns, people familiar with the negotiations, who requested anonymity to discuss the matter, said. politically sensitive issues said.
The Petrobras presentation flagged the risk of a shortage in the third quarter, as diesel demand increased seasonally in Brazil as well as in the United States. The South American country began exporting the world’s largest soybean crop in August.
“Without a signal on market prices ahead, there is a risk of a shortage of diesel fuel during the peak of demand during the harvest season, affecting Brazil’s GDP,” Petrobras said in the presentation. titled “Fuel: Challenges and Solutions” and dated May. Year 2022.
Petrobras did not respond to a request for comment.
Diesel supplies have become a global concern since sanctions against Russia reshaped fuel trade and pushed international inventories to historic lows. Importing countries are at risk of both rising costs and supply shortages, as the industry closes refineries to fix or cut carbon emissions.
Two sources said there was concern in Brazil over diesel imports in the second half of this year after US Gulf refineries, the country’s main suppliers, began diverting cargoes to Brazil. Europe.
“Global diesel inventories are much lower than the historical average,” Petrobras said in a presentation shared with the Department of Mines and Energy. “Petrobras alone cannot tackle rising energy prices globally.”
Energy Minister Adolfo Sachsida called oil analysts on Friday to ask about diesel shortages in the second half of the year, said a person directly connected to the matter. The department did not respond to a request for comment.
“If Petrobras stops selling diesel at international prices for more than two or three weeks, there is a chance the pumps will run out,” said a top executive at a major diesel producer.
Subsidy Proposal
Petrobras executives, whose law prohibits the sale of fuel at a loss without compensation, suggested in the presentation that Brazil could cut taxes or subsidize fuel for consumers, citing examples. of several European Union countries.
Fuel subsidies cost Brazil about 7.5 billion reais ($1.6 billion) in 2018, when former President Michel Temer implemented them over several months to stop a rally by drivers trucks nationwide.
The cost of a similar measure this year could surpass 60 billion reais, one of the people close to the discussions estimated.
Russia’s invasion of Ukraine has pushed crude oil prices to a 14-year high. This month, global shortages have cost diesel traders a premium of more than $50 per barrel.
At the maximum, Brazil’s diesel inventories can meet the country’s needs for about a month. According to two sources, at Petrobras, the supply is at about half capacity.
Brazil places orders in June for the August-October soybean harvest, when most grains arrive via long-distance shipping routes.
The company has already started moving to suppliers further afield in West Africa and India, one of the sources said. But while a Gulf diesel shipment takes two to three weeks to reach Brazil, a ship from India can take 45-60 days.
“If refineries in the US were damaged during hurricane season, or anything else that contributed to a tighter market, we could be in real trouble,” a Petrobras executive said. known on condition of anonymity.
