Fuel prices: market fears solution in Treasury, not Petrobras

Fuel prices: market fears solution in Treasury, not Petrobras

Since the announcement of General Joaquim Silva e Luna’s resignation from the presidency of Petrobras, national and foreign banks and consultancies have been publishing analyzes of the impacts on the company’s management with the change of command.

The government’s choice by economist Adriano Pires was well accepted because it does not pose a threat to Petrobras’ pricing policy. The risk lies precisely in the solution advocated by the new CEO: public money for subsidies.

With an eye on public accounts and the measures that the government has been adopting to stimulate the economy, many economists know that there is no room in the federal budget to accommodate a subsidy policy. The idea has the emphatic disapproval of Minister Paulo Guedes, who takes advantage of the increase in revenue to reduce taxes, not to increase spending.

“This year there is money left over, including because of the rise in commodity prices. But this collection will return to normal and it will wither. Now there is room, President Bolsonaro wants to be reelected, but the fiscal problem for 2023 will be much worse than estimated so far. Whether they’ll be able to do it, you can’t be sure because Paulo Guedes never wanted to. The pressure is to spend,” Tomás Awad, founding partner of 3R Investimentos, told CNN Brasil.

The creation of a stabilizing fund for prices is also defended by Pires. Provided for in the project approved in the Senate that is paralyzed in the House, the fund would also depend on resources from the Treasury, indirectly. The source pointed out by the project are royalties and dividends paid by Petrobras to the federal government. The problem is that these resources have been helping to cover the deficit in public accounts for more than five years.

Hours before confirmation, Adriano Pires wrote a text on a social network that caught the attention of many analysts. He stated that the risk of intervention in

Petrobras before the elections is very low for two reasons. “The first is that the company’s regulation and compliance after Lava Jato make it very difficult for both the Board of Directors and the Board of Directors to take actions that could harm shareholders. Second, if President Bolsonaro intervened in the company, he would be accused of doing the same policy as Lula,” he said in the publication.

In market jargon, Adriano Pires’ statement hours before being confirmed as Petrobras’ new CEO is called a “hedge”. The word in English means “protection” for operations with financial assets. The conclusion of analysts heard by the column is that Pires protects himself, in advance, from the accusation of playing the role of the government’s gateway to the management of the oil company.

The search for recent statements by Adriano Pires in interviews and articles corroborates his view of the episodes involving Petrobras. In a recent conversation with Estadão, he went so far as to say that it would be very difficult to find someone in the market willing to risk his own CPF by accepting to hold prices at the state-owned company.

“I find it very difficult to find someone who will go to Petrobras to hold the price”. According to the report, Pires said that “if someone goes to Petrobras and holds the price of fuel, they are putting their CPF on the table”, he told the newspaper.

By pointing the finger at the Ministry of Economy, Adriano Pires arrives at Petrobras with the mission of easing the company’s communication with society, but leaving no doubt that the solution that President Bolsonaro wants is not in the company, but under the responsibility. by Paulo Guedes.

Source: CNN Brasil