Politics, Business & Culture in the Americas

Brazil’s Gas Station Blues

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The result was conclusive from Brazil’s fifth and final presidential debate last night, which started at 11 pm so as not to conflict with the soap opera “Imperio”: Sunday’s election is too close to call. (And also, candidates’ plans for Brazil’s future are less important to Brazilian telenovela fans than the fictional future of Rio de Janeiro’s rich and famous.)

So to get a sense of what voters are thinking ahead of Sunday’s vote, I ambushed a few Brazilians filling up their vehicles at the gas stations here in Curitiba. In any democracy, the choice at the ballot box often reflects which candidate is best for a voter’s wallet, and many of Brazil’s 143 million voters will be directly affected by what the next president does to the price of government-regulated gasoline and oil.

The number of cars in Brazil grew by 123 percent over the past decade to 80 million, meaning that the price at the pump increasingly influences Brazilians’ choice on the ballot. Drivers can directly attribute today’s pump price to President Dilma Rousseff, who in 2011 set an artificially low sales price for gasoline that cost state oil company Petroleo Brasileiro SA (Petrobras) tens of billions of dollars a year, but kept many of her constituents happy.

That includes Aminadabe Marcante, an attendant at Presidente gas station in central Curitiba, who told me that he’ll be voting for Rousseff because he doesn’t want change in this election. “I don’t have time to watch TV or debates,” Marcante said. “I’m voting for Dilma because she’s been good for the poor.”The price of fuel has been unchanged since November 2013—which has been good for Marcante’s wallet, since he drives 35 miles a day. Here in Curitiba, the price of gasoline is around 2.75 real per liter ($4.16 per gallon), diesel is 2.30 real per liter ($3.48 per gallon), and ethanol is 1.85 real per liter ($2.80 per gallon)—about 15 percent below international levels, but higher than average U.S. gas prices

Had Marcante watched last night’s debate, he would have seen seven of the 11 presidential candidates onstage.  Each candidate had the opportunity to call on another by name and hold a one-on-one confrontation at the front of the stage: Rousseff called on challenger Aécio Neves, who called on leading opposition candidate Marina Silva, who called on Rousseff. The debate was very much about those three frontrunners.

Problematically for Marcante, the price of fuel is expected to rise no matter who becomes the next president, because Petrobras is now the world’s most indebted major oil company.

A senior government official told Reuters in August that domestic fuel prices could rise up to 6 percent after the election. Silva has been most explicit about the subject, saying she would reinstate the fuel tax that Rousseff eliminated, and also allow prices to fluctuate more with the market.

The forthcoming price hike will fan inflation, which is already running around 6.6 percent.

But many investors and economists say the hike is necessary at a time when the Brazilian economy is running out of gas, so to speak. The economy contracted in the first half of the year amid falling industrial production and a pullback in spending from increasingly indebted consumers. Last year, the government posted the worst annual budget gap on record, spending $65 billion more than it took in.

For Marlly de Paula, a cashier at Soberano gas station in Curitiba, neither the economy nor the price of gas is a top concern for her or the many drivers she chats with daily.

“I’m voting for Marina,” she said, referring to Silva, the environmentalist who upended the race in August after the death of her party’s first candidate. “She was a fighter for the people. I’ve followed her for a long time. I can tell that she really cares for the people.”

Voting is mandatory in Brazil, but millions of people still say they’re either undecided or unimpressed with the candidates. Among them is Acel Schellil, who I spoke to as he refilled his work truck at Ipiringa gas station in Curitiba. He drives about 100 miles a day, installing and repairing glass windows, but he said the price of gasoline is irrelevant because he dislikes all the candidates and will be voting “blank” on Sunday. 

The latest survey from pollster Datafolha projects that President Rousseff will take 40 percent in the first round, compared to Silva’s 24 percent and Neves’ 21 percent. If nobody wins more than 50 percent of the vote Sunday the election will proceed to a second round runoff on Oct. 26. In a runoff, Rousseff is projected to defeat Silva by 7 percentage points, according to polls this week from both Datafolha and Ibope.

Tags: Brazilian elections, Dilma Rousseff, Marina Silva
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