Petrobras share prices plunge after Bolsonaro criticism
Petrobras share prices plunge after Bolsonaro criticism
Shares in Brazilian oil company Petrobras plummeted more than seven percent Monday after President Jair Bolsonaro criticized the organization's pricing policy in the face of rising crude prices due to the war in Ukraine.
The far-right leader, who has a habit of targeting the state-run company every time it raises prices, said that the "parity with the international price" of oil "cannot continue," in an interview with a radio station in the northwestern state of Roraima.
The drop in share prices, due to the nervousness of investors, led to the fall of the Ibovespa index, the main index on the Sao Paulo Stock Exchange.
Ibovespa was down 2.52 percent at close.
Bolsonaro met with specialists Monday afternoon to discuss a solution to the expected effect on fuel prices -- which are estimated to rise 30 percent -- in the context of skyrocketing international oil prices following Russia's invasion of Ukraine.
The Brazilian president is seeking to stop Petrobras from raising prices for Brazilian consumers before the October elections, when Bolsonaro will seek reelection.
Brent North Sea crude for May delivery was up 4.31 percent to $123.21 per barrel on Monday.
West Texas Intermediate crude, the other market benchmark, was up 3.21 percent to $119.40.
The Brazilian government is evaluating different options, including asking Petrobras shareholders to suspend price adjustments during the Ukraine war; withdrawing certain federal taxes; or a possible fuel subsidy, which would add to already high public spending.
In 2021, fuel prices rose nearly 50 percent, bringing overall inflation in Brazil above 10 percent, the highest rate since 2015.
M.Palmer--MC-UK
