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Petrobras CEO resigns amid fuel price anger

June 20, 2022

The head of Brazil's state-run oil company has stepped down following mounting political pressure over a fuel price hike. Brazilian President Jair Bolsonaro had called the move a betrayal of the Brazilian people.

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Gasoline and diesel prices are displayed near a gas station, following the announcement of updated fuel prices, at the Brazilian oil company Petrobras in Brasilia, Brazil
The resignation comes after Brazil's Petrobras announced gas and diesel price hikes on Friday — just three months after the last riseImage: Ueslei Marcelino/REUTERS

The head of Brazil's state-owned Petrobras oil company, Jose Mauro Coelho, resigned from his post as CEO on Monday, the company announced.

He's the latest top executive of the energy giant to be ousted amid disagreements with President Jair Bolsonaro over fuel pricing policy, with Bolsonaro facing a spike in inflation and a reelection bid in October.

Standoff over fuel prices

Coelho stepped down from his role as chief executive on Monday morning and resigned as a board member, Petrobras said in a securities filing. The company added that an interim CEO would soon be appointed.

The move came just days after Petrobras announced that it would increase gasoline and diesel prices at its refineries, with the price hikes taking effect on Saturday.

The last price hike for gasoline and diesel came three months ago. Official figures show that Brazil's fuel prices have already risen by over 33% in the past year, following a global trend.

Third CEO since 2019

Bolsonaro slammed the move as a betrayal of the Brazilian people and one that "could sink Brazil into chaos."

Jose Mauro Coelho, CEO of Brazilian state-owned oil company Petrobras
Jose Mauro Coelho was appointed as the Petrobras chief executive in April this yearImage: Andressa Anholete/REUTERS

Other Brazilian politicians also criticized the move, with Lower House Speaker Arthur Lira calling for Coelho's resignation.

Coelho, who was appointed to the post in April this year, is the third Petrobras CEO to have come and gone since Bolsonaro took office in early 2019.

The president has frequently disagreed with the heads of the state-run oil company, leading to the ouster of former CEOs Roberto Castello Branco and Joaquim Silva e Luna.

Double-digit inflation

With Brazil's presidential election coming up in early October, the country's economy and high inflation will likely dominate the campaigns. Bolsonaro faces a difficult run for reelection from leftist former President Luiz Inacio Lula da Silva, who served as president from 2003 to 2010.

Like many other countries around the world, Brazil is facing rising costs for fuel and other commodities. Inflation in the South American country currently stands at over 11.7%, far outpacing Brazil's central bank inflation target of 3.5%.

Brazil's economy has struggled to recover from the hit taken during the coronavirus pandemic. Economic uncertainty and price hikes have also risen amid Russia's invasion of Ukraine.

rs/msh (Reuters, AFP, Lusa, EFE)