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Montevideo, July 4th 2022 - 05:35 UTC



Petrobras CEO Coelho bows to pressure and resigns

Tuesday, June 21st 2022 - 09:21 UTC
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Exploration and Production Chief Fernando Borges has been appointed interim president Exploration and Production Chief Fernando Borges has been appointed interim president

After barely 40 days on the job, José Mauro Coelho resigned as CEO of Brazil's state-run oil company Petrobras due to pressure from President Jair Bolsonaro and other politicians over a recent increase in the price of fuel, which drives inflation upwards ahead of the Oct. 2 elections. Bolsonaro had dubbed the price hike a “betrayal” of the Brazilian people.

The company has appointed Exploration and Production Chief Fernando Borges, as interim president.

Coelho's decision also entails leaving his post within Petrobras' Board of Directors, according to a statement.

Last week, the company has increased the price of gasoline at pumps by 5.2% and diesel by 14.3%, after which company shares fell by more than 9%. Following Coelho's resignation, trading in Petrobras shares has been temporarily suspended.

Bolsonaro had announced his intention to appoint Caio Paes de Andrade as the fourth Petrobras CEO during his presidency. However, the company's board of directors explained that Paes de Andrade's appointment process would need to be deliberated upon.

Lower House Speaker Arthur Lira, who shortly after the company announced the new price adjustment called on his Twitter account for Coelho's departure: “The president of Petrobras has to resign immediately,” Lira said on social media.

Coelho had succeeded Roberto Castello Branco and Joaquim Silva e Luna, both of whom were ousted after disagreements with Bolsonaro over the company's fuel pricing policy.

Bolsonaro and Lira have discussed opening a congressional investigation into Petrobras' board of directors.

Paes de Andrade, an official within the Economy Ministry, needs the approval of Petrobras' board of directors, which might take some time, according to company sources.

A Petrobras board member has suggested a 45-day freeze on fuel prices in exchange for the government withdrawing its proposal to reshuffle the company's board and executives, it was reported, although the June 17 proposal has not been formally discussed.

Categories: Energy & Oil, Politics, Brazil.

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