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On Monday night (23/05), Mines and Energy Ministry announced the dismissal of yet another Petrobras president. After 40 days in office, José Mauro Ferreira Coelho was removed from his position in the country’s biggest company. He was the third president of the state-owned company in the current government. The two previous ones were Roberto Castello Branco and Joaquim Silva e Luna. In addition to the President, some of Petrobras’ directors are expected to be replaced too.
The New President
To replace José Mauro Coelho, the government decided to appoint Caio Mário Paes de Andrade, an assistant to Minister Paulo Guedes at the Economy Ministry, where he held the position of secretary. Andrade has a degree in social communication from Universidade Paulista, a postgraduate degree in administration and management from Harvard University and a master’s degree in business administration from Duke University, in the United States. Andrade was previously director-president of the Federal Data Processing Service (Serpro), a public information technology company responsible, for example, for sorting emergency aid records. The nomination must be approved by Petrobras’ Board of Directors, in which the government has a majority as it is the company’s major shareholder.
The Government’s Fight to Contain Fuels Prices
The three Petrobras presidents dismissed were victimized by the progressive rise in fuels prices. President Jair Bolsonaro has consecutively demanded that prices be contained. The President has even called the state-owned company’s profit, driven by the increase in oil prices in the international market and the rise in the dollar value, a “rape” and pressured the company not to readjust prices. The dollar and the international barrel price affect fuels value, and consequently Petrobras’ profit due to the international price parity standard, which was adopted by the company during President Michel Temer’s government, in 2016.
Andrade’s Mission
For political commentators, if approved as Petrobras President, Andrade will have the mission to change the company’s price policy. According to media sources, Government members informed that Andrade should not completely change the import price parity rule but adjust the current system. The Government expects to have increases, but they should be granted over longer periods – around 100 days –, at least during exceptional moments, such as the current one, with the war between Russia and Ukraine. For the central authorities, the company could also absorb part of the costs in these periods, reducing its profitability.
Challenges
To complete this mission, the company’s statute will have to be changed, because, according to the current rules, the Government is responsible for “absorbing the costs”, not Petrobras. However, to change the statute, it is necessary to change the directors, which do not accept such measure. In addition, if the Government wants to hold fuel prices over longer periods, it will also have to make another change in the company’s rules so that it is possible to suspend the import price parity in specific moments.
