Petrobras CEO quits after trucker strike
Action raises questions about Brazil economy
RIO DE JANEIRO — The president of Brazilian state oil company Petrobras resigned Friday, the latest fallout from a crippling truckers’ strike over fuel prices that has widespread implications for the future of Latin America’s largest economy.
The strike led to shortages of supplies ranging from food to medicine, shuttered thousands of public schools and grounded airline flights.
It ended earlier this week when President Michel Temer announced plans to subsidize a 10 percent drop in the price of diesel for 60 days. While many speculated that Petrobras CEO Pedro Parente could end up resigning, the government also had much hope that he would not.
“This shows the weakness of Temer’s government and its inability to maintain the combination of reforms it had put in place,” said Andre Perfeito, chief economist at Spinelli CVMC, an investment company in Sao Paulo.
Temer had gone to great lengths to argue that bucking to truckers’ demands would not interfere with Petrobras’ ability to set prices, a key part of the company’s rebuilding plan after a massive corruption scandal.
He also said Parente, widely respected in financial and government circles in Brazil and beyond, would remain in place.
The markets, however, were not convinced Petrobras’ stock price dropped sharply recently.
In his resignation letter, Parente said the strike had set off an intense debate over Petrobras’ pricing policies but little reflection about the realities of world fuel prices. “My remaining as president of Petrobras would not contribute positively to the alternatives the government must come up with going forward,” he wrote.
Ultimately, truckers and many other sectors in Latin America’s largest nation want a permanent return to the recent past, when the government and Petrobras would set fuel prices that were heavily subsidized. But that stands in stark contrast to Petrobras’ approach since Temer took over from President Dilma Rousseff when she was removed from office in 2016.