Since mid-2016, Petrobras had pegged fuel prices in refineries to international fluctuations. That policy is gone four and a half months into the Lula administration
If you had to pay attention to just one Brazilian company in order to get a decent handle on the country's economy, it would be state-controlled oil and gas major Petrobras.
Combined, its ordinary and preferential shares make up more than 12 percent of Brazil's Ibovespa benchmark stock index: meaning that if Petrobras has a bad day, the entire Brazilian market typically comes off looking bad too.
But Petrobras isn't just a corporate heavyweight, it is also controlled by the Brazilian government, which holds a majority share in the company. As such, watching Petrobras straddle its responsibility to the country and to its minority shareholders often gives a useful insight into the economic climate in Brazil.
And on Tuesday, Petrobras made a big announcement, confirming that it has changed its pricing policy for fuels.
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This week's podcast is supported by Dal Pozzo Advogados. Dal Pozzo represents some of Brazil's biggest infrastructure groups and helps foreign clients navigate the country's complicated legal and regulatory system.
This episode used music from Uppbeat. License codes: Aspire by Pryces (B6TUQLVYOWVKY02S). Critical Evidence by Alex Besss (1QCCVJYDY4LBVKIE), Habanera Bizet Hip Hop Remix by All Good Folks (RYQTLVRLGEIQRLFY)
In this episode:
Fabiane Ziolla Menezes is deputy editor of The Brazilian Report. She covers tech and economics.
Background reading:
Controlled prices or free market? That's the Petrobras dilemma. Dilma Rousseff artificially held fuel prices down. Michel Temer let them run loose. And both models generated crises � with the oil giant at its center.
Petrobras shareholders in April elected six names proposed by the federal government to the company's board of directors � and confirmed former Senator Jean Paul Prates as its new chief executive.
Listen to episode #203: The President v. Petrobras. We explain how Jair Bolsonaro, in the last year of his administration, tried to tamper with the prices of fuel sold by Petrobras, as part of his strategy of keeping voters happy in order to boost his re-election chances.
Listen to episode #189: Gas prices put Bolsonaro in a bind. We explain how the ghost of inflation haunted former President Jair Bolsonaro, who ran out of ways to hold fuel prices down.
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