Petrobras Head Resigns as Bolsonaro Rages About Fuel Prices

Petrobras’s chief executive officer Jose Mauro Coelho resigned following a fuel price increase that has angered President Jair Bolsonaro and prompted calls for a congressional inquiry.

Petroleo Brasileiro SA as it is officially called, announced its resignation on Monday. Bolsonaro had fired Coelho already in May, and named a successor. However, he continued in his role as the state-owned oil company went through formalities to appoint the next CEO.

The Rio de Janeiro-based company, which recently lost the title of Latin America’s most valuable publicly-traded firm to miner Vale SA, lost about 35 billion reais ($6.8 billion) in market value since Friday, when it raised domestic fuel prices, irking Bolsonaro and his allies. In Sao Paulo’s early trading, preferred shares fell as high as 5.1% to 25,91 reais.

“We don’t expect noise to fade until October,” Banco BTG Pactual SA analysts led by Pedro Soares wrote in a note. “Any future pressure to raise fuel prices will find major government pushback between now and election day.”

Brazil’s president, who is seeking re-election in October, has been publicly bashing Petrobras for what he calls “abusive profits” and has sacked three of its chief executive officers over frustration with the company’s wholesale fuel prices that track international levels. The main complaints of voters are the pump prices and inflation.

Bolsonaro claimed on Saturday that he is able to get the support of Congress for an investigation into the pricing and control policies at the state-controlled firm. Lower house Speaker Arthur Lira has also threatened to intervene by imposing punitive taxes on the company’s record profits.

—With assistance from Martha Beck.

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