Brazil's president Jair Bolsonaro has instructed his finance minister to reduce a federal tax on diesel in an 11th hour effort to head off an independent truck drivers' strike scheduled to kick off on 1 February.
Regional oil workers' labor federation FUP said yesterday it would participate in the strike to protest the "dismantling" of state-controlled Petrobras, exacerbating the potential impact of a work action.
"Today PIS/Cofins tax is R0.33 per liter. I told the economic team to cut it by R0.09. For every penny I had to look for revenue elsewhere or look for a new tax or raise other taxes," Bolsonaro said last night during his weekly social media broadcast.
The R0.09/l relates to Petrobras' latest wholesale diesel price increase on 27 January, which came after weeks of claims by fuel importers of government meddling in the market. It is not clear if finance minister Paulo Guedes has already enacted the reduction, or the source of the substituting revenue. The finance ministry has not commented.
Any perception of a return to government interference could impact investor interest in Petrobras' ambitious refinery divestment plans.
On a webinar yesterday, Petrobras chief executive Roberto Castello Branco said the threat of strike was not the company's concern and defended the firm's pricing policy. The company's market-based pricing has undergone many changes since its adoption in 2016, but executives say it continues to be guided by import price parity.
A 10-day truckers' strike in 2018 snarled food and fuel supplies across Brazil and ultimately became a major headache for Petrobras, which was forced to adopt a temporary diesel subsidy the company did freeze prices in the first days, but it was Temer that granted the subsidy near the end and the government that paid for it. And chief executive Pedro Parente—the architect of the company's market-based pricing policy— was forced out. On the presidential campaign trail at the time, Bolsonaro supported the truckers.
