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On Monday (18/07), Petrobras Board of Directors considered ineligible two names nominated by the Jair Bolsonaro government to be directors of the state-owned company: Civil House Executive secretary Jônathas Castro, and National Treasury General Attorney, Ricardo Soriano. The committee assessed that they have a conflict of interest, as they occupy positions that discuss issues related to the state-owned company as representatives of the Bolsonaro’s Government. The new composition of the board will be voted on by the General Shareholders’ Meeting, convened for August 19th. The government can insist on both nominations, submitting the names directly to the assembly, but, according to political commentators, this would not only generate wear and tear and expose the Planalto Palace to an eventual legal action.
Objective
The Federal Government wants to regain two seats on the Petrobras Board of Directors and have eight representatives on the body again. The objective is to change the current board of the state-owned company, and thus be able to make adjustments to the company’s pricing policy.
Inflation
The mismatch between high international demand for commodities and other products and the incapacity of the economy to quickly return to pre-pandemic levels of production associated to the embargoes and fears caused by the war in Ukraine led to a global inflationary movement. Internally, high governmental spending, the breach of the spending limit and natural instabilities of an election year gave even more strength to the rising inflation. Fuels were specially affected by this scenario. One of the ways to control the effects of inflation on fuels would be changing Patrobras pricing policy. However, for that, the Government would have to change the company’s internal rules, which demands the Board of Directors’ approval.
The Pricing Policy
Since 2016, under the Michel Temer government, Petrobras has adopted the so-called international parity policy (PPI), according to which fuel prices vary according to price fluctuations in the foreign market. When the measure was adopted, Petrobras said there could be a reduction in prices to consumers, but in recent months, with the war in Ukraine and the rise in the dollar, prices have risen successively.
