Martha Beck and Simone Iglesias, bloomberg News

BRASILIA
EnergiesNet.com 05 12 2022

Brazilian President Jair Bolsonaro replaced his Energy Minister just days after state-run Petroleo Brasileiro SA ignored his plea to not raise fuel prices, which has become a major political issue ahead of his re-election bid in October.

Bento Albuquerque, who served in the role for more than three years, will be replaced by Adolfo Sachsida, who most recently served as special adviser to Economy Minister Paulo Guedes, according to a decree published Wednesday in the Official Gazette. Sachsida has worked at the ministry during Bolsonaro’s entire term.

The change was above all a political gesture from Bolsonaro, said one person with knowledge of the matter. The president wants to show publicly that he is trying to do something about rising fuel prices, the person said, asking not to be named because the matter isn’t public.

Bolsonaro recently appointed his third Petrobras chief executive officer after dismissing the previous executives due to frustration over their insistence in raising fuel prices in line with global levels at a time when Russia’s invasion of Ukraine and subsequent sanctions have upended the energy market.

Albuquerque insisted that Petrobras could not hold fuel prices steady unless there were subsidies, adding to pressure from Bolsonaro’s political advisers to find room in the budget to pay for fuel and energy subsidies ahead of the election, according to people with knowledge of the matter.

His decision to leave came after he failed to solve Brazil’s fuel price problem without affronting Petrobras shareholders and interfering with the company’s pricing policy, one person familiar with the matter said, asking not to be named because the information isn’t public.

Sachsida is against subsidies for fuel prices or measures such as creating a fund to smooth out price volatility. His appointment was seen as a victory for Economy Minister Paulo Guedes, whose views are aligned with Sachsida’s. For the economic team, the national oil giant could be more socially sensitive when transferring oil prices increases to fuel in the domestic market.

Last week, Bolsonaro dedicated part of his weekly Facebook Live program to criticizing Petrobras’ exorbitant profit figures and asking the board to refrain from lifting fuel prices again. Annual inflation is running above 12% and Bolsonaro trails ex-President Luiz Inacio Lula da Silva in all opinion polls, with economic issues at the forefront of voters’ minds. Lula has vowed to change current fuel price policy at Petrobras.

bloomberg.com 05 11 2022