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Common sense prevails at Petrobras


The current pricing policy of Petrobrascriticized by both the federal government and the left-wing opposition, underwent a critical test at the meeting of the state-owned company’s Board of Directors this Wednesday, the 27th. There was the possibility of changing both the policy itself and transferring responsibility for this definition to the board itself, and no longer to the company’s board. At the end, everything was kept as it waswith only the formalization of a practice of accountability that was already being done, even though it was not included in the guidelines of the state company on price formation.

It is true that the International Parity Price (IPP) policy, at this very moment, ends up making fuels thanks to the “perfect storm” formed by the high prices of Petroleum in the international market and by the devalued exchange rate, with the dollar being quoted above R$5 over most of the last few months. But it is still the best option to guarantee minimum conditions of competition for players companies that have been establishing themselves in Brazil and that have already become necessary so that the country does not face a crisis in the supply of fuels similar to that of the Argentinawhere the left-wing government has intervened in the prices of state-owned YPF.

The electoral campaign, unfortunately, is fertile ground for all types of populism, as it is much simpler to make immediate promises than to explain complex issues such as the formation of fuel prices and the consequences of interventionism.

If Petrobras abandoned the PPI and began to offer artificially cheaper fuels, choosing to absorb the loss by reselling oil derivatives at prices lower than those purchased on the international market (as, incidentally, was done during part of the Dilma Rousseff, leading the state-owned company to an extremely precarious financial situation), private refiners and importers would soon fail as they were unable to compete with the state-owned giant under these conditions. The country would return to a de facto monopoly situation, even though on paper it has already been abolished – and a monopoly unable to meet national demand, which would lead to chaos in supply.

Former President, Ex-Convict and Ex-Convict Squid has been ignoring this reality when it promises to “Brazilianize” fuel prices (in other words, to despise the exchange rate) as a way of making them cheaper – the promise, already made on other occasions, was repeated in a recent interview with the UOL portal. According to Lula, the president “lacked courage” Jair Bolsonaro to change the pricing policy, in yet another of its reductionisms as simplistic as they are misleading. The fact is that, as much as Bolsonaro continues, yes, making numerous criticisms – which we consider wrong, for the reasons already exposed – to the PPI, changing it would not simply be a matter of “courage” (it would be better to call it “imprudence”. ), then there are a series of legal obstacles, such as the Petroleum Law, the Corporation Law and the State-owned Companies Lawthe latter approved in response to the looting committed by the EN at Petrobras and other companies. That there has been no change in the pricing policy under Bolsonaro – even if this displeases him – is something to be praised, not criticized.

The electoral campaign, unfortunately, is fertile ground for all types of populism, as it is much simpler to make immediate promises than to explain complex issues such as the formation of fuel prices and the consequences of interventionism. There are factors that Brazil cannot control, such as the global demand for oil and its price, influenced by issues such as the war in ukraine – and the recent drops have been passed on by Petrobras, as happened last week and this Thursday. But, in order to depend less on international moods, what can really be done internally to offer cheaper fuel to the population on a lasting basis is the greater opening of the oil and gas sector in all its phases, reforms and adjustments that give fiscal solidity to the country and value the real, a tax reform intelligent system that does not burden production and consumption so much, and the expansion and modernization of the refinery park. These would indeed be intelligent proposals that candidates should embrace, instead of the interventionism that has already proved to be a failure in Brazil and in other countries.

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