Shares In Brazil's Petrobras Plunge 20%
Muhammad Irfan 7 days ago Tue 23rd February 2021 | 09:30 AM
Rio de Janeiro, (UrduPoint / Pakistan Point News - 23rd Feb, 2021 ) :Shares in Brazil's state-run oil company, Petrobras, plummeted Monday after President Jair Bolsonaro changed the firm's chief executive, fueling fears he will intervene in energy prices and the economy in general as he eyes re-election.
Under ousted CEO Roberto Castello Branco, Petrobras had increased fuel prices four times so far in 2021, a cumulative rise of nearly 35 percent.
The increases came as international oil prices, which hit all-time lows last year, returned to pre-coronavirus pandemic levels, pushed higher by output cuts in oil-producing countries and optimism that vaccines against Covid-19 will spur a global economic recovery.
But as the far-right president gears up his bid to win re-election in 2022, he looks increasingly inclined to ditch tight-belt, small-government policies for populist economics.
"He's been at home for 11 months without working. He's working remotely. This is a time when the boss needs to be at the front," said the president, an outspoken critic of social distancing policies against Covid-19.
It was Bolsonaro's latest move to take power from technocrats and hand it to the military, which holds huge sway in his administration: nine of his 23 ministers are current or former officers, plus his vice president.
Bolsonaro added that "no one is going to interfere in Petrobras's pricing policy." But analysts and markets did not seem convinced.
"It's a clear signal he's going to intervene on prices. And we know when that's been done in the past under (former president) Dilma Rousseff, it led to very big losses for Petrobras," he told AFP.
The company has been selling off assets and slashing spending to put its books in order since revelations of its role in a huge bribe-paying scheme exploded in 2014.
The Brazilian real meanwhile fell 1.26 percent against the Dollar.
The president said Saturday he was looking at "putting a finger" on electricity costs, as well, amid ongoing discussions on privatizing Eletrobras.