Bolsonaro also called for the election of a new board of directors, according to a statement issued near midnight local time on Monday by the state-controlled company, opening the way for a complete reshuffle of executive management.
Jose Mauro Ferreira Coelho is the third Petrobras CEO to be sacked by Bolsonaro over fuel prices. The president, who is seeking re-election in October but is trailing in the polls, says Petrobras should use its profits to lower fuel prices and help control inflation.
Bolsonaro, who also fired his energy minister earlier this year, named Cayo Mario Pais de Andrade to replace Coelho.
Petroleo Brasileiro, as the company is officially known, is controlled by the government by a majority of voting shares, even if private investors own more than 60% of the company.
Brazil is entering an important window to secure diesel supplies, and the Petrobras administration alerted the government last week that pumps could run dry during the main soybean harvest if the company does not sell the fuel at market prices, according to four people close to the discussions and an internal official. View seen by Reuters.
Petrobras said the company and other importers will struggle to secure diesel amid the most severe fuel shortage in 14 years, according to the sources.
There are concerns about those concerns, said people familiar with the talks, who asked not to be named to discuss the politically sensitive issue.
Petrobras’ presentation highlighted the risk of shortages in the third quarter, when diesel demand will rise seasonally in Brazil as well as in the United States. The South American country began shipping the world’s largest soybean crop in August.
“If there is no indication of future market prices, there are physical risks of diesel shortages during peak demand during the harvest season, affecting Brazil’s GDP,” Petrobras said in the presentation titled “Fuel: Challenges and Solutions” and dated May. . 2022.
Petrobras did not respond to a request for comment.
Diesel supplies have become a global concern since sanctions against Russia have reshaped the fuel trade and pushed international stocks to historic lows. Importing countries are limiting the risks of rising costs and supply shortages, as the industry shuts down refineries for repairs or to cut carbon emissions.
Concerns in Brazil about diesel imports in the second half of the year rose after US refineries in the Gulf, its main suppliers, began redirecting shipments to Europe, two sources said.
“Global diesel stocks are well below the historical average,” Petrobras said in the joint presentation with the Ministry of Mines and Energy. “Petrobras alone cannot solve the global rise in energy prices.”
Energy Minister Adolfo Sachida on Friday called on oil analysts to ask about diesel shortages in the second half of the year, a person directly involved in the matter said. The ministry 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 that the pumps will run dry,” said a senior executive from a large diesel company.
Petrobras executives, whose regulations prevent them from selling fuel at a loss without compensation, suggested in the presentation that Brazil could cut taxes or subsidize fuel to consumers, citing the example of several EU countries.
Fuel subsidies cost Brazil about 7.5 billion reais ($1.6 billion) in 2018, when former President Michel Temer applied them for a few months to stem a nationwide protest of truck drivers.
The cost of a similar procedure this year may exceed 60 billion riyals, according to an estimate by one of the people close to the discussions.
The Russian invasion of Ukraine sent crude oil prices to a 14-year high. This month, a global shortage has led diesel dealers to pay a premium of more than $50 a barrel.
At the maximum, Brazilian diesel stocks can cover about a month of national demand. According to two sources, supplies in Petrobras are about half of their capacity.
Brazil books shipments in June for the soybean harvest from August to October, when most of the grain reaches port via long trucking routes.
One source said the company has begun turning to remote service providers in West Africa and India. But while Gulf diesel shipment takes 2-3 weeks to reach Brazil, ship from India may take 45-60 days.
“If US refineries are damaged during hurricane season, or if anything else contributes to tightening the market, we could be in real trouble,” said a Petrobras executive, who asked not to be identified.
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