(Bloomberg) -- The slump in crude prices may be coming just in the nick of time for the head of Brazil's state-run oil company, who has been under intense political pressure.
President Jair Bolsonaro has blamed Petroleo Brasileiro SA Chief Executive Officer Joaquim Silva e Luna for pain at the pump, fueling speculation that Luna could lose his job after a 25% increase in diesel prices last week. Bolsonaro was critical of the move, saying publicly that nobody's job was safe. Oil's dip below $100 a barrel this week has all but removed the remaining gap between what Petrobras charges at the refinery gate and foreign levels, possibly sparing Luna any immediate pressure to hike again. To be sure, markets remain extremely volatile and any relief could be short-lived.
As a state-controlled company in a country where voters and politicians say the domestic oil industry should shield it from international price swings, Petrobras's management often comes under attack when prices surge. Two of its past three bosses have left or been pushed out amid fuel-price disputes. Last week, Petrobras and the government discussed fuel subsidies, without reaching an agreement.
Later on Tuesday, Bolsonaro said he expected Petrobras to reduce its fuel prices after the recent drop of oil in international markets, according to an interview with TV Ponta Negra posted online.
The difference between domestic and international prices has fallen to 2% for diesel, down from 40% on March 9 -- the day before a domestic adjustment was announced -- and 9% on March 11, after the adjustment went into effect, according to Abicom. The association of fuel importers has criticized Petrobras for selling at a discount and undermining other importers. The gap for gasoline is down to 6%, it said.
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