Temer under pressure following truck protests
May 29, 2018
Brazilian petrol stations and supermarkets may slowly be receiving much needed supplies, but more than a week of truck driver protests has caused fuel shortages that continue to restrict public transport in many cities. Only some bus lines are in operation. In many places, schools and universities remain shut. Experts estimate it will take until next weekend before life finally returns to normal.
But some truck drivers are still protesting. On Tuesday, roadblocks and demonstrations were reported in 20 Brazilian states. Ten airports are still short on fuel and dozens of flights have had to be canceled. Initially, truck drivers had protested for lower fuel prices and demanded tax breaks for the transport sector. But now, some media pundits suspect, protesters want nothing less than for Brazilian President Michel Temer to resign, and for semi-public oil company Petrobras to radically change course.
The truckers' roadblocks have illustrated just how much political power they wield and just how dependent the country is on its highways — funds for Brazil's train sector have been continuously slashed in recent decades. And now that Brazil's government is reeling under the protests, taxi drivers and motorbike couriers are considering joining the fight over fuel costs.
Failed talks
On Sunday, Temer's government agreed to the truckers' main demands, announcing that over the next 60 days, diesel prices would be slashed by 10 percent. In addition, toll operators will not charge unloaded trucks and a minimal toll for freight transports was agreed.
It was also guaranteed that independent transport agencies will be commissioned with at least 30 percent of all transport contracts for Brazil's national supply company Conab. For now, several other demands remain unmet — including that fines imposed during the blockade be scrapped.
Temer and his highly unpopular government have taken a serious hit. It has been claimed that the government knew about the protest in advance but failed to act, and then only began serious talks with union representatives on the fourth day of demonstrations.
But only a few truck drivers were content with the earlier agreement announced on Thursday, which angered Temer. On Friday, he ordered the military to free the highways of roadblocks. The military, however, has focused on escorting tanker trucks on their journey out of fuel depots. Some Brazilian media outlets have speculated that the government can no longer fully count on the military. Discontent with the country's political leadership is rife among its ranks too, say some media pundits. Temer's hasty decision in February ordering the army to ensure Rio de Janeiro's security certainly did not go down well.
Once the truck driver protest is resolved, Temer faces fresh challenges. The country's oil workers have threatened a 72-hour protest starting Wednesday. They demand that petrol and cooking gas prices be lowered. Ultimately, they want Petrobras to stop importing petroleum derivatives and scrap planned privatizations. They blame Petrobas boss Pedro Parente for the crisis and want him to resign.
Temer without political allies
Petrobras is paying a hefty price now that Temer agreed to regulate diesel prices. Since protests began, the oil giant's stock price has lost a third of its value — some 130 billion reais ($35 billion/€30 billion) — which has had negative repercussions for Brazil's financial market.
Former presidents Lula da Silva and Dilma Rousseff froze the price of oil, which cost Petrobras billions and pushed its value to a historic all-time low. The "Lava Jato" corruption scandal, with Petrobras at its center, only made matters worse.
When Temer took office in August 2016, he promised no more political meddling in Petrobras' business decisions. Turning the company around meant setting a realistic oil price on the basis of global market demand. Temer's success in breathing new life into Petrobras was one of his few notable achievements — something which now is in jeopardy.
Things will get worse still if Temer interferes with toll charges, a move that could scare off private investors. With Brazil's economy desperate for private investment in the country's rundown infrastructure, such a decision could have disastrous consequences.
Temer, meanwhile, has no political allies to count on. His support base in Congress is waning. With just four months until the general election, even former allies like the president of the Chamber of Deputies, Rodrigo Maia, is keeping his distance. Maia announced on Tuesday that he would not support the government's proposed tax hike, which is meant to generate funds needed to pay for concessions made to the truck drivers. Maia was adamant that Congress would not be told what to do by Finance Minister Eduardo Guardia. But if Congress rejects the government's proposals, more chaos could be around the corner.