(Reuters) – Brazilian President Jair Bolsonaro, frustrated that he has been blamed for gasoline price increases, is now inclined to privatize oil company Petrobras (PETR4.SA), he said on Thursday, adding he would discuss the idea with economic advisors.
“Now I want to privatize Petrobras. … I will check with the economic team what we can do about it. Because I cannot control the company, I cannot direct gasoline prices, but when it rises it is my fault,” Bolsonaro said in a radio interview.
On Wednesday, Economy Minister Paulo Guedes suggested the government could sell part of its controlling stake in the state-run company to fund welfare programs.
Petrobras has become a hot political topic as energy costs have driven Brazil’s consumer inflation into double digits, hurting Bolsonaro’s popularity ahead of next year’s presidential election.
The far-right populist previously opposed privatizing Petrobras, calling it “strategic” for Brazil’s national interests. Yet even with his backing, some market participants believe a privatization process might be difficult as it would involve a broader range of stakeholders.
Bolsonaro was elected in 2018 and at the time backed Guedes’ privatization agenda, but so far has sold a limited number of state companies.
Former Petrobras fuel distribution subsidiary BR Distribuidora (BRDT3.SA), currently known as Vibra, was privatized in 2019. State-run power company Eletrobras (ELET6.SA) is expected to go through a capitalization round in early 2022.
After urging Petrobras executives to keep down prices in recent years, Bolsonaro has said he respects the company’s independent pricing policy, instead urging state tax reforms to bring down prices.
Ilan Arbetman, an analyst at Ativa Investimentos, said a potential privatization process would need to be taken very carefully, noting that a model for Eletrobras’ sale was discussed for a long time until being settled earlier this year.
“When we talk about privatizing Petrobras, we need to be careful, because its a broad process that involves a lot of stakeholders. Right now timing is weighing on it – even more than the president’s inclination,” Arbetman said.
Preferred shares in Petroleo Brasileiro SA, as the company is formally known, jumped after Bolsonaro’s comments, rising nearly 2% before paring gains to around 1% in morning trading.