PBR - Change in management (again)?

Daily Crunch #6

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(4 minutes read)

Petrobras’ CEO, Mr. Luna e Silva, has been under fire after PBR announced a new fuel price increase in the past few days. Though Mr. Luna admits he’s been suffering intense political pressure, he refuses to leave the post (Portuguese only).

According to the local press (Portuguese only), President Bolsonaro is considering changing Mr. Luna. Also, the Presidents of the Lower House and the Senate call a “common fight” for lower fuel prices and advocate changes in the fuel price policy.

On Mar 8th, I wrote the Government sent Petrobras the eight nominations for forming the state-owned company’s next board of directors, whose election will take place on Apr 13th.

The president of Flamengo (local football/soccer team), Rodolfo Landim, is the nominee for the chair of the collegiate president. Landim is a former career employee at the state-owned company, where he worked for 26 years, though his reputation is questionable.

Following, On Mar 11th, I wrote that PBR had announced a new price increase — 18.8% for gasoline and 24.9% for diesel in refineries, and 16% for cooking gas (“LPG”).

The company was widely criticized. Ohe of the prominent leaders of the 2018 truck drivers’ strike says that Brazil had to stop in protest against the fuel increase announced.

The president of the Lower House, Arthur Lira, criticized the decision of Petrobras to readjust prices of gasoline and diesel. He highlighted the company’s “insensitivity” with Brazilians and called the increase a “slap in the face” for the country.

My sooner thought was that I was wrong about Mr. Landim’s nomination to the board and that the Government wasn’t interested in changing the fuel price policy.

Nevertheless, it looks my the government agenda was — indeed — to change fuel price policy by appointing a new CEO and Chairman for the company.

Though we’re dealing with speculations, it’s certainly weighing on the stock today.