Justice overturns gas price increase in Rio de Janeiro

Judge André Felipe Alves da Costa Tendinnick, of the Court of Justice in Rio de Janeiro (TJ-RJ), has just accepted the request of the Legislative Assembly (Alerj) and vetoed the increase in gas proposed by Petrobras.

In the decision, he considers the increase to be abusive and determines that it be suspended until CADE takes a stand on Naturgy’s claim alleging breach of contract because of the readjustment.

The judge understands that the increase “is only for profit and offends the human rights provided for in the Federal Constitution, dignity and basic human needs, which are above private rights.”

According to a statement released this Tuesday afternoon (28), the decision is valid only for the state of Rio de Janeiro. The expectation with the measure is that other states will take the same decision.

This morning, gas distributors from at least five Brazilian states (Rio de Janeiro, São Paulo, Ceará, Sergipe and Alagoas) are contesting in court the 50% increase suggested by Petrobras for cooking, industrial and CNG gas. The Holy Spirit filed an injunction to prevent the discharge, but the request was denied.

A CNN contacted Petrobras to question the rise in prices and the movement of companies in court. In a statement, the state-owned company only said that it would not comment on judicial issues in this case.

Petrobras even suggested, initially, an adjustment of up to 200% in prices with the justification of the rise in the dollar and the value of a barrel of oil, but the Brazilian Association of Pipeline Gas Distributors (Abegás) reported that it negotiated a less impactful increase , of 50%, and that Petrobras agreed with the value. The new price would start to take effect at the turn of the year in the dollar rate.

The government’s view is that the increase could scare away industries interested in setting up in Rio de Janeiro and would also impose losses on companies already installed in Rio de Janeiro.