The board of directors for Petróleo Brasileiro SA, Brazil’s state-controlled oil company, announced on Saturday its approval to join a government subsidy program for diesel fuel. The program was established by the Brazilian government as part of an agreement aimed at ending a nationwide truckers’ strike over rising fuel costs.
According to a securities filing released by Petrobras, the company will participate in a program that provides a subsidy of 1.00 real ($0.19) per liter of diesel. The government-funded measure is scheduled to last for 30 days.
The decision was made amid a multi-day strike by independent truckers that caused widespread disruptions across Brazil. The industrial action, which began in protest of Petrobras’s fuel pricing policy, led to shortages of food, gasoline, and medical supplies in major cities. Highways were blocked, and many sectors of the Brazilian economy reported significant operational challenges due to logistical failures.
In response to the strike, the Brazilian government announced a series of measures intended to address the truckers’ concerns. The diesel subsidy, which Petrobras has now formally joined, was the central component of the government’s proposal. Officials stated the cost of the subsidy program would be covered by the national treasury.
The strike was initiated over a Petrobras policy implemented in 2017 that ties domestic fuel prices to international oil prices and currency exchange rates. This policy resulted in frequent, sometimes daily, adjustments to gasoline and diesel prices at the refinery, which truckers cited as a source of financial instability for their operations.
The approval from the Petrobras board was a required step for the company, which is publicly traded in addition to being state-controlled. The board’s action formally aligns the company with the government’s plan to reduce diesel prices at the pump without altering the company’s underlying pricing policy. The government has stated the measures are designed to provide temporary price stability while seeking a long-term solution.
