Petrobras CEO resigns after truckers strike cripples Brazil
Policy that saw costs rise sharply prompted widespread anger
RIO DE JANEIRO: The CEO of Brazil’s troubled state-controlled oil major Petrobras, Pedro Parente, resigned Friday in the wake of a devastating truckers’ strike over high fuel prices that cast doubts over the future of the powerful company. Petrobras, a pillar of the Brazilian economy, said Parente “tendered his resignation as president of the company this morning.” A new interim CEO, Ivan Monteiro, was named later Friday, the official Agencia Brasil said.
Parente quit after President Michel Temer bowed to demands from truckers for cheaper fuel, guaranteeing them discounted diesel for a period of 60 days. This eroded the autonomy granted to Petrobras in late 2016 to set its own prices-a key demand of investors, but a policy that saw costs for motorists rise sharply, prompting widespread anger. And in the aftermath of the strike, which for nine days shut down gas stations and food deliveries across Brazil, Temer rattled markets by hinting he might restore government price setting, before he backtracked.
Following a wild day on the Sao Paulo stock exchange, where Petrobras shares closed nearly 15 percent down, the energy ministry put out a statement reassuring that the pricing policy will remain. While consumers will be “protected” from price volatility, Petrobras will “maintain the current practice of market prices for producers and importers, which the current administration considers a fundamental point for attracting investments,” the ministry said.
The truckers’ strike was followed Wednesday by a strike of oil workers demanding Parente’s resignation, and threatening an indefinite strike later this month. Temer’s inability to resist the pressure left him more than ever a lame duck ahead of October elections that he will not contest. “If the truckers’ strike showed people one thing, it’s that the Temer government is finished,” said Marco Antonio Teixeira, a political analyst at the Getulio Vargas Foundation.
‘Restored reputation’
Parente headed Petrobras from July 2016 and was tasked with restoring credibility and financial health to the huge company after it was embroiled in Brazil’s biggest ever corruption scandal, known as the “Car Wash” investigation. Politicians and Brazilian executives had colluded for years with Petrobras’ leadership to fleece the oil major through sweetheart contracts and kickbacks. The scandal has ensnared everyone from Temer, who faces two criminal charges, to ex-president Luiz Inacio Lula da Silva, who is now serving a 12-year prison sentence.
In a letter to Temer, Parente said he left Petrobras “with a restored reputation,” but that his “remaining in the presidency of Petrobras is no longer positive.” Parente defended Petrobras’ pricing policy, which was partly intended to remove the company from political influence, saying that price hikes reflected “the global economy and its effects in the country.” However, Simao Zanardi-a director at Brazil’s biggest oil union federation, the FUP-called Parente’s exit “a victory.” “He was much more an employee of the markets than he was of Petrobras,” Zanardi said. The Forca Sindical trade unions group said that Parent’s departure “will only bring benefits to Brazilian society.” Andre Perfeito, at the Spinelli financial consultancy, said Parente jumped what looks like an increasingly troubled ship. “Parente noted the high social tensions in Brazil, that politicians are calling for his resignation, and also that much of what was promised to the truck drivers will not be possible to deliver,” Perfeito said. “Getting ahead of this, he said, ‘OK, I’d rather not be part of this.’”