Business

Brazil close to paralysis as truckers press on with strike

Friday, May 25, 2018

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BRASÍLIA, Brazil (AFP) — Brazil appeared on the verge of a standstill on the fourth day of a nationwide truckers' strike yesterday as road blockades caused severe shortages of fuel and food, despite a move by the State-owned oil company to defuse the crisis.

Airports and gas stations were running out of fuel, food prices were spiralling and agricultural exports were hit.

Truckers have attempted to put a stranglehold on movement of goods in Brazil to protest fuel price rises.

The increases are the result of a politically sensitive decision made in late 2016 to allow the Petrobras oil giant autonomy over its pricing, as well as a rise in world prices in recent weeks.

But the determination of the truckers has caught centre-right President Michel Temer's Government flat-footed, five months ahead of presidential elections.

Petrobras yielded to pressure on Wednesday and temporarily reduced fuel prices, sending its shares plunging more than 13 per cent on the Sao Paulo stock market by late yesterday afternoon.

But the truckers yesterday were still blocking main arteries in 24 of the 27 states in the vast country, which has only limited rail services.

In the port of Santos near Sao Paulo — the largest in Latin America — there have been virtually no arrivals or departures of trucks for three days, the management said, even if the “loading and unloading operations of ships continues normally” for now.

In the capital Brasilia, the airport was allowing only planes to land that had enough fuel to take off again.

At five other airports, including Recife in the northeast and Congonhas in the economic capital of Sao Paulo, fuel reserves could run out yesterday, the G1 news site said.

Various abattoirs have also halted operations, affecting a key export sector.

Prices of fruits and vegetables were rocketing in some places to 400 per cent, due to supply problems.

Pump prices were also higher, and long lines formed at many gas stations.

A spokeswoman for Rio's fuel retailers' union Sincomb told AFP that the main service stations were last supplied on Monday.

“There is a lack of fuel in practically all the service stations that we have contacted,” she said.

As a way of defusing an increasingly out-of-control situation, Petrobras Wednesday announced a temporary price reduction of 10 per cent.

“It is a one-off measure. It doesn't represent a change in pricing policy,” Petrobras chief Pedro Parente told journalists. “These are 15 days for the Government to reach a deal with the truckers.”

But the head of the Abcam truckers' association, Jose de Fonseca Lopes, was unimpressed. “It is not what we need,”, he told CBN radio.

Temer was to meet with truckers' representatives late yesterday, following the failure of talks on Wednesday.

The movement appeared to have some popular support.

“I think that this has been provoked by poor management by the federal government,” said Ana Maria Lobo, a driver waiting in line at a gas station in Sao Paulo, who also noted “all these corruption scandals”.

In another temporary measure, the lower house of Congress decided late Wednesday to suspend the introduction of two taxes on diesel until the end of the year.

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