Brazil’s state-run company Petrobras cuts fuel price

FE Team | Published: May 24, 2018 21:55:30

RIO DE JANEIRO, May 24 (AFP): Brazil's state-controlled oil company Petrobras yielded Wednesday to pressure and temporarily reduced fuel prices after striking truckers threatened to paralyze airports and nationwide commerce.
The 10 per cent price reduction will only last two weeks and was offered as a way of defusing an increasingly out-of-control situation.
"It is a one-off measure. It doesn't represent a change in pricing policy," Petrobras chief Pedro Parente told journalists. "These are 15 days for the government to reach a deal with the truckers."
Truckers have attempted to put a stranglehold on movement of goods in Brazil to protest the fuel price rises, with refinery diesel before tax up 12 per cent this month and petrol up 14 per cent.
The increases are the result of a politically sensitive decision made in late 2016 to allow Petrobras autonomy over its pricing.
But the determination of the truckers has caught center-right President Michel Temer's government flat-footed.
The third day of strikes saw road blocks erected in at least 17 of the 27 states, the Federal Highway Police said.
The blockages provoked huge tailbacks on highways, disrupting national freight deliveries, with local media reporting increases in fruit and vegetable prices in Rio de Janeiro and Sao Paulo.
Brasilia's international airport said that the drying up of fuel deliveries meant it could not resupply aircraft.
"Only aircraft capable of taking off without needing to refuel will (be allowed to) land at Brasilia Airport," it said in a statement.
G1 news site reported that five other airports, including the Congonhas airport in Sao Paulo and the airport in Recife, had only enough fuel for Wednesday.
Although five tankers did get through to Brasilia late Wednesday, the "alert situation and contingency measures at the terminal remain in place," the airport said.
Gas stations in Rio de Janeiro were also running short.
"There is a shortage in practically all the stations that we have checked. In some they'll run out today and others have only enough until Friday," said a spokesman for the Rio fuel trade union.
In another knock-on effect, the national post office said it had to suspend express deliveries because they could no longer be guaranteed.
The drivers' discontent adds to pressure on Temer's lame-duck government ahead of October general elections. Market reforms are the central plank of his unpopular leadership and there would be heavy investor resistance to the idea of stripping Petrobras of its pricing freedoms.
Temer told journalists he wanted strikers to accept "a kind of truce so that in two or three days at most we can manage to find a satisfactory solution."
But the truckers were standing firm.
"As long as the government doesn't take effective measures, we firmly demand demonstrations in every region of the country," union president Jose da Fonseca Lopes said.
For one trucker, Paulo Sergio Ribeiro Ramos, snarling up the roads is the only way to get his voice heard.
"Gas has gone up, diesel has gone up. Road tolls have gone up, and bills have gone up," the 43-year-old driver told AFP on a highway outside Rio de Janeiro. "If we don't demonstrate, we will end up unemployed."