Brazilian Taxpayers Will Suffer the Consequences of Cheaper Diesel for Truckers

[Judi Lynn]

05/25/2018 - 11H29

TALITA FERNANDES
LAÍS ALEGRETTI
JULIO WIZIACK
DANIEL CARVALHO
FROM BRASÍLIA

The Brazilian government announced yesterday an agreement with truckers' representatives to suspend their strike for 15 days. Since Monday (21), the strike has caused road blockades in 25 states, affecting goods distribution in the country.

In addition to promising to reduce the CIDE fuel tax on diesel - a measure already announced on Tuesday (22) - the government said it will reimburse Petrobras in case of losses so that the company may extend the 10% discount of on the price of diesel in the refinery for a month.

After the first month, the government stated it will maintain the subsidy so that diesel prices in the refinery may be adjusted every 30 days.

This mechanism will be implemented until the end of the year and, according to the government's estimate, Petrobras will receive about R$ 5 billion (US$ 1.37 billion) - Petrobras has suffered a 14% drop in the stock market after the government's intervention in its policy, despite efforts of the company's president, Pedro Parente, to soothe investors.

The fast pace at which the strike has spread raised suspicions that transportation companies were participating in the strike, which is prohibited by law. This would be the so-called lockout, a work stoppage organized by the business sector.

More:
http://www1.folha.uol.com.br/internacional/en/business/2018/05/1969836-brazilian-taxpayers-will-suffer-the-consequences-of-cheaper-diesel-for-truckers.shtml