RIO DE JANEIRO, Brazil (AFP) — A truckers’ strike paralysing fuel, goods and food deliveries across Brazil entered an eighth day Monday despite unpopular President Michel Temer’s decision to cave in to the drivers’ key demand for lower diesel costs.

Road blockages by truckers remained in place in 25 of the country’s 27 states, G1 news site reported, bringing Latin America’s biggest economy to its knees.

Shortages of aviation fuel paralysed eight airports and essentially shut down the huge Santos sea port near São Paulo, which usually receives 10,000 trucks a day and now gets only a trickle.

Although there has been some improvement since the army was ordered to intervene last Friday, with armed soldiers escorting fuel trucks on priority routes, enormous lines of cars continued to form at gas stations.

Many supermarkets around the country still struggled to source fresh food. Producers reported having to slaughter stocks of chickens because they had no access to the feed, while others threw out thousands of litres of spoiled milk.

Hospitals in Rio de Janeiro and São Paulo had to cancel non-urgent surgeries and at least 13 states reported cancelling university classes. Adding to the mayhem in Rio, a key commuter system, the BRT, operated at only 22 per cent capacity.

But after agreeing Sunday to slash diesel prices, the Government insists the crippling stand-off will now wind down.

“The expectation is that the demonstrations will end and the truckers will return to work today,” said Minister Carlos Marun on CBN radio. “There are still some blockades but the protest strike has been resolved.”

According to Marun, those still resisting represent “an anarchic, radical movement which we believe will not succeed”.

Truckers are angry over the rise in costs from 3.36 reais (92 US cents) a liter in January to 3.6 reais before the strike. On May 26, it hit 3.8.

After urgent negotiations with representatives of the truckers, Temer agreed to cut the diesel price by 0.46 reais a litre for 60 days.

That concession hammered the value in State-controlled oil major Petrobras, one of Brazil’s most dominant companies. Shares dropped eight percent Monday and 14 per cent last Thursday.

The Ibovespa index in São Paulo was down 2.37 percent early Monday.

Unpopular president’s austerity plan

Despite government assurances, truckers outside Rio de Janeiro vowed to continue their hard line.

Temer’s concession “was nothing. It’s only for two months and diesel is way too expensive. It should be reduced at least one real. People will stay here until the fight is over. It depends on the president,” truck owner Yago Marquezine, 25, said.

The crisis has exposed the surprising fragility of the giant economy and put Temer’s lame-duck Administration on the defensive ahead of October general elections.

Temer took power in controversial circumstances in 2016, following the impeachment and removal from office of his leftist predecessor Dilma Rousseff for breaking budget rules.

Temer’s market-friendly centre-right Government then launched into sweeping austerity reforms that have been widely praised by investors as a bid to return Brazil to fiscal health, but proved hugely unpopular with ordinary Brazilians.

Approval ratings for Temer and his government are in the single digits, despite officials’ claims that the reforms have helped bring Brazil slowly out of a deep recession.

The current row over fuel is part of that wider conflict, with costs rising significantly since Temer’s politically sensitive decision in late 2016 to allow Petrobras autonomy over its pricing. The rise in world oil prices in recent weeks has also been a factor.

“This war doesn’t belong to the truckers, but to the Brazilian people!” chanted a crowd blockading the Duque de Caxias refinery outside Rio de Janeiro.

Brazil is a member of the G20 group of the world’s largest emerging and advanced economies. The first five days of the strike were estimated to have cost $2.8 billion, according to the daily Folha de São Paulo.