Brazilian Vice President Michel Temer said he sees no room for a fuel price increase before presidential elections in October.
“I don’t think so. I can’t say with complete certainty,” Temer, 73, said in an interview at Bloomberg’s headquarters in New York, in response to whether Petroleo Brasileiro SA would raise fuel prices before the election. “I don’t have information about it, but I’m not seeing the possibility.”
Petrobras rose 6.6 percent to 16.46 reais today, the biggest jump in more than a week, after a poll showed reduced support for Rousseff’s re-election bid. The government controls Petrobras’s board with a majority of voting shares, and investors were encouraged by the possibility of a change of administrations, said Paulo Brito, an investment manager at the brokerage firm HPN Invest in Recife, Brazil.
The company’s refining and distribution unit has posted $38 billion in losses since 2011 when it started subsidizing imported fuel. Petrobras most recently raised gasoline and diesel by 4 percent and 8 percent, respectively, late last year.
The government’s approval rating fell to 36 percent last week from 41 percent in February as 72 percent of respondents said a change in policies is needed, according to a survey published April 5 that was conducted by public opinion research company Datafolha. That is the lowest approval since August.
The April 2-3 survey by Datafolha of 2,637 people has a margin of error of plus or minus 2 percentage points.
“It’s inevitable to link inflation and the president’s popularity,” Temer said. “If inflation takes off, there’s no doubt it will have negative repercussions for the government, and even in the election.”
Economists in an April 4 survey by the central bank published today increased their 2014 inflation forecast to 6.35 percent. The worst drought in more than half a century pushed food and beverage prices up 1.11 percent in the month through mid-March, more than twice the rate in February. Inflation quickened to 5.9 percent in mid-March.