President Jair Bolsonaro is willing to accuse Petrobras of anti-competitive practices at the Administrative Council for Economic Defense (Cade).
In fact, it has already done this by guiding the AGU to initiate studies that can act against the company in cases that are already being processed by the Council, taking advantage of the existence of demands in which Cade questions Petrobras for other reasons, but which could be added by new questions.
Bolsonaro is not worried about the consequences of this for the market, or even for the company. The president wants an argument to, together with his supporters, say that Petrobras is responsible for inflation.
He has already been organizing the scheme together with Centrão, whose senator Ciro Nogueira appointed the new president Alexandre Cordeiro, and which would be the channel to put the issue on the body’s judgment agenda.
A government action against Petrobras at Cade scares the market. Not because the company lost the lawsuit. But because that would make it clear that the Government starts to appropriate the actions of the collegiate.
It would damage Brazil’s reputation internationally, and it scares companies because in disputes, companies try before going to court. And as Cade only falls to those who are big, a suspicion about Cade’s control would have international repercussions.
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The president is not worried about that. As fuel increases are one of the issues where he loses support, he decided to use the government structure to formally attack a government-controlled company. The government has a majority of the members of the Board of Directors and appoints the chairman of the board and the president of the company.
In fact, the president is trying to distance himself from responsibility for the rise in inflation.
The action against Petrobras at Cade is not a matter of fighting inflation, since it is strongly increasing government expenditures, even harming the action of the Central Bank. This is an attempt to convey the image that the Petrobras issue is not a government problem.
The government’s action was reinforced by the appointment of the new Minister of Mines and Energy, Adolfo Sachsida, who took office promising studies to privatize Petrobras.
The new minister’s behavior and the president’s threats in his speeches reveal that the oil company will have to defend itself against the actions of its largest shareholder and main beneficiary in terms of dividends, royalties and special participations.
In a statement to the market, the company clarified that it does not hold talks with the Administrative Council for Economic Defense (Cade) about changes in its pricing policy.
The company also informs that it is not aware of any findings of violations to the economic order in the administrative proceedings underway at CADE.
And that reiterates its commitment to the practice of competitive prices and in balance with the market, following up and down variations, while avoiding the immediate transfer of volatility to domestic prices.
In fact, today there is not even a government action against Cade, and that means that any definition of prices charged by the company would hardly be defended until the end of Bolsonaro’s term.
But the mere mention of an action would serve the president’s interests in the campaign. He could say that, without being able to change the pricing policy, he is trying to intervene in the company through Cade.
To this end, ministers Paulo Guedes and Adolfo Sachsida would take care of formatting the speech on an economic level, including reformulating the idea of privatizing the company.
At least until now, the chances of the Government debating in Congress a reduction of its participation in the company’s capital are slim.
Yesterday, the president of the Senate, Rodrigo Pacheco – House that must, by law, analyze a possible proposal – said that “The privatization of Petrobras is definitely not a short-term solution”. In other words: this year, hardly any senator will dedicate a minute to discuss the privatization of Petrobras.
In fact, the issue of privatization does not give a vote to any deputy or senator from the allied base. But ministers Guedes and Sachsida will want to help.
They can harm Petrobras and the company that takes care of defending itself, but they know that an eventual victory by Bolsonaro in the next elections is the only chance for them to continue in office.
And they highly value it.