Bolsonaro Minister Vows Petrobras Privatization in 10 Years
(Bloomberg) -- Brazil plans to privatize state-controlled oil producer Petrobras within a decade as part of a wider effort to make the country more competitive, Economy Minister Paulo Guedes said Monday. The shares rose.
The pledge from Guedes, a champion of free markets, comes as President Jair Bolsonaro is lagging in opinion polls for reelection next year and faces increasing pressure to lower fuel prices even as oil rallies. Bolsonaro said earlier that, while his government is looking at ways to address rising fuel prices, he can’t make decisions within Petrobras. He also reiterated support for Guedes.
Petrobras Chief Executive Officer Joaquim Silva e Luna, speaking at a separate press conference on Monday, also made investor-friendly comments by pledging to continue adjusting fuel prices to international levels. Privatizing Petrobras, as well as state-run lender Banco do Brasil, would shield the companies from political interference. Despite naming a former general to run Petrobras, Bolsonaro’s government has let the company be managed independently.
“What is the plan for the next 10 years? Continue with the privatizations. Petrobras, Banco do Brasil, everyone getting in line, getting sold and transforming into social dividends,” Guedes said .
Also See: Surging Brazil Fuel Prices Put Spotlight on Petrobras Policies
Guedes, who has been advocating for the privatization of Petroleo Brasileiro SA, as the oil producer is formally called, made the comments during an online event hosted by the International Chamber of Commerce. Silva didn’t comment on privatization, and stressed the amount of dividends the company is paying to the government, which could increase this year.
Petrobras is publicly traded but the government owns the majority of voting shares.
Petrobras rose 0.9% to 27.14 reais in Sao Paulo after a rocky day of trading on comments from Guedes and Luna. The company’s American depositary receipts climbed 1.5% in New York.
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