Bolsonaro’s Privatization Talk Masks Struggle to Unload Petrobras Refineries
The Brazilian oil giant's efforts to sell six more fuel plants are hitting a wall, and a looming presidential election will only make it harder.
Jair Bolsonaro during an Independence Day rally in Sao Paulo, on Sept. 7.
Photographer: Jonne Roriz/BloombergFor all President Jair Bolsonaro’s recent talk of privatizing Brazil’s crown jewel, oil giant Petrobras has struggled even to unload a handful of refineries. And its chances have never looked worse.
With global fuel demand still reeling from the pandemic and refineries shutting down elsewhere, Brazil is giving potential buyers another reason for pause: Petrobras is under mounting pressure to sell cheaper gasoline and diesel — a practice that has caused it tens of billions of dollars of losses in the past and would undermine competition. The president himself has often clamored for lower fuel prices as the country grapples with double-digit inflation ahead of an election next year.
Since emerging from a massive graft probe, Petrobras has sought to bill itself as an independently managed producer focused on the largest deep-water oil finds this century. It has a goal of raising $35 billion from asset sales, including eight refineries, but so far has only managed to sell two of them and raise about a 10th of that target.