Brazil: Jair Bolsonaro Pushes Diesel Prices Down with Major Russian Oil Purchase

Brazilian President Jair Bolsonaro announced on Tuesday that his country would soon receive a shipment of 35 million liters (about 9.2 million gallons) of diesel fuel from Russia, one of several major purchases meant to keep fuel prices low.

Bolsonaro is facing reelection this year, forcing presidential frontrunner and former President Luiz Inácio Lula da Silva into a runoff vote this weekend. The two candidates will face a second round of voting on October 30.

Gasoline and other fuel prices have become a key issue in the presidential race as Brazilians, like much of the world, face inflation and concerns regarding limited oil supplies. Brazilian leftists have pressured Bolsonaro to impose price controls on gasoline and diesel, which the government has the power to do as it controls Petrobras, the national oil company, but Bolsonaro has insisted on rejecting government intervention in the economy. Bolsonaro’s administration has, however, used its status as controlling shareholder in Petrobras to remove several presidents of the company on the grounds that they have resisted lowering fuel prices.

Bolsonaro boasting that Russian oil purchases will keep Brazilian diesel prices low also serves as a clear rebuke of calls from America and Europe to sanction or boycott Russian industries in an attempt to avoid funding Russia’s invasion of Ukraine. Bolsonaro has condemned the sanctions and refused to cut business ties with Russia, declaring Brazil “neutral” in the war and also maintaining communication with Ukrainian President Volodymyr Zelensky.

Lula, a far-left socialist, has declared himself in favor of the Russian invasion of Ukraine and personally insulted Zelensky as a “nice comedian” who has no business running a country.

Sanctions on the Russian oil industry have resulted in Russia having to sell its oil and natural gas products at much lower prices, given the falling demand. Patrons such as India, Saudi Arabia, and China – in addition to Brazil – have taken advantage of the opportunity even in the face of pressure from Europe not to do business with Russia.

“Close to 35 million liters of diesel imported from Russia will reach the Santos port,” Bolsonaro announced via Twitter on Tuesday. “Other import operations are in progress. New shipments are expected for October, increasing competition and pushing fuel prices down.”

The Bolsonaro administration announced its intention to increase Russian oil purchases in July. Brazilian Foreign Minister Carlos França called Russia a “strategic partner” at the time and said that Brasilia sought to make as favorable a deal as possible to purchase diesel.

“Of course, we have to make sure that we have enough diesel for the Brazilian agribusiness and, of course, for Brazilian drivers,” França said at the time. “So that’s why we were looking … for very reliable suppliers of diesel and Russia is one of them.”

At the United Nations General Assembly last month, Bolsonaro boasted of significantly improving Brazil’s economy – causing deflation at a time during which many major countries are fighting inflation – and explicitly rejected world sanctions on Russia.

“We have reduced inflation, with an estimate of less than seven percent annually in 2022. I am pleased to announce that we had unprecedented deflation in Brazil in the months of July and August,” Bolsonaro told the global forum in New York. “Since June, the price of gasoline has dropped by more than 30 percent. Today, a liter of gasoline in Brazil costs about $0.90. The price of electricity also fell by more than 15 percent.”

Bolsonaro reiterated at the United Nations that Brazil would not take sides in the Ukraine invasion, calling for “an immediate ceasefire, the protection of civilians and noncombatants, the preservation of critical infrastructure to assist the population and the maintenance of all channels of dialogue between the parties in conflict.” He insisted, however, that the world not pursue sanctions against Russia for invading and colonizing parts of Ukraine.

“We support all efforts to reduce the economic impacts of this crisis. But we do not believe that the best way is to adopt unilateral and selective sanctions, that are inconsistent with international law,” Bolsonaro said. “These measures have harmed the economic recovery and threatened human rights of vulnerable populations, including in European countries.”

Brazil is part of an economic bloc known as BRICS along with Russia, named for its member states: Brazil, Russia, India, China, and South Africa. Bolsonaro has refused to cut ties with Kyiv, however, most recently speaking to Zelensky in July. Prior to his conversation with the Ukrainian president, Bolsonaro claimed to have found “the solution to this,” meaning the war, and that he would soon tell Zelensky how to end it. At press time, the war between Russia and Ukraine has not concluded.

At home, Bolsonaro has struggled with a months-long feud with the leadership of state oil company Petrobras, accusing it of exploiting high oil prices globally to rake in exorbitant profits. Bolsonaro fired his third Petrobras president, José Mauro Ferreira Coelho, this year alone in May. Ferreira lasted 40 days on the job.

“People are pleading with Petrobras, don’t readjust the price of gasoline. You are raking in absurd profits,” Bolsonaro said in early May during a Facebook live broadcast. “She [Petrobras] should have a social function. Petrobras, we are at war. Petrobras, don’t increase the price of gasoline. Your profits are a rape, are an absurdity.”

Bolsonaro insisted during those remarks, and has repeatedly promised, not to use government power to impose price controls on oil or otherwise interfere with the free market.

“Intervention is out of the question,” Bolsonaro said in May.