MercoPress. South Atlantic News Agency

Bolsonaro favors reviewing Petrobras' formula to adjust price of fuel

Petrobras “follows market prices,” said Retired General Silva e Luna

Brazil's President Jair Bolsonaro Tuesday said he intended to have Petrobras' international parity system reviewed, although he fell short of disclosing how he planned to go about it.

Bolsonaro insisted the mechanism whereby the state-run oil company sets the price of fuel for consumers needed adjusting, as inflation takes a grip on the country's economy.

“I have no control over it, it has its team. It seeks profit. We had a serious problem in the past, in addition to corruption, the issue of parity with the international price. We are seeking to review this issue,” Bolsonaro said.

”We have an action before the Federal Supreme Court (STF) that has been going on for four months, we regret it took so long, we want to regulate a provision of a constitutional amendment of 2021, to define the value of the ICMS [parity scheme],“ the president explained.

Meanwhile, Petrobras CEO Joaquim Silva e Luna, denied the state-owned company was to blame for the increase in gasoline and claimed Petrobras has not had a monopoly in the fuel sector in Brazil since 1997 and that, therefore, it is not correct to hold it solely responsible for the increase in prices, according to UOL.

”Much of society is tied to Petrobras yesterday and not today. The assertion that the company is a monopoly is not correct,“ he declared.

Silva e Luna also said Petrobras ”follows market prices“ and that it readjusts fuel prices ”observing the external and internal markets, competition between producers and importers and price variations in the world market.”

Bolsonaro and Economy Minister Paulo Guedes have insisted over the past few months on the convenience of privatizing the company which was already causing too many headaches to the head of state.

Petrobras is a state-owned company with open capital that is listed on the New York and Sao Paulo Stock Exchanges. Guedes has also mentioned the possibility of selling some stock if full privatization was too big a step at this time.