Bolsonaro fires another Petrobras chief executive

Brazil's federal government has decided to replace Petorbras chief executive Jose Mauro Ferreira Coelho with finance ministry veteran Caio Mario Paes de Andrade, a decision that is likely to deepen a leadership crisis during an already difficult election year.

Seasoned technocrat Ferreira Coelho took over at the firm in mid-April after Brazilian president Jair Bolsonaro fired former chief executive Joaquim Silva e Luna following a mid-March increase in wholesale gasoline and diesel prices. Since assuming the role almost 40 days ago, Ferreira Coelho has been clear in his intent to stick with the import price parity principle that guides Petrobras' market-based fuel pricing and on 10 May, against Bolsonaro's urgings, increased refinery gate diesel prices by 9pc.

The increase led to the immediate firing of former mines and energy minister Bento Albuquerque, a former navy admiral who was replaced by Adolfo Sachsida — another finance ministry veteran — earlier this month. Sachsida has moved quickly to start the process for the privatization of Petrobras and state-owned pre-salt marketing firm PPSA, plans that Andrade, a debureaucratization secretary, could help advance. Sachsida and Andrade are both connected with Bolsonaro's finance guru Paulo Guedes, the economy minister whose star has dimmed in recent years.

In announcing the replacement, the mines and energy ministry acknowledged volatility associated with several geopolitical factors. The ministry said it is necessary to strengthen the investment capacity of the private sector and that it was working to find a balance between generating value for Petrobras and for the whole of society.

The change in chief executives has triggered a new vote on the composition of Petrobras' board, a saga that attended the ouster of Silva e Luna. In April, Bolsonaro's initial picks for chief executive and chairman of Petrobras' board were unable to assume the roles because of conflicts of interest.

Ferreira Coelho is the third Petrobras chief executive to be fired by Bolsonaro because of an unwillingness to bend to the will of the federal government, Petrobras' controlling shareholder. Brazil's political class has demanded the firm suspend its market-based pricing during the market volatility caused by Russia's invasion of Ukraine, a change in policy the company has yet to adopt. Trailing in polls ahead of October elections, Bolsonaro is struggling to ease the pain of high retail fuel prices that are helping drive inflation at an annualized 19-year high of 12.1pc in April.

By Nathan Walters