Brazil's Bolsonaro to meet with Petrobras head, discuss diesel prices

By Gram Slattery and Ricardo Brito

RIO DE JANEIRO, Feb 4 (Reuters) - Brazilian President Jair Bolsonaro said he will meet on Friday with his Cabinet and the head of state-run oil company Petrobras to discuss diesel prices, a move that is not unprecedented under his administration, but could cause market jitters nonetheless.

In a live video broadcast on Facebook on Thursday night, Bolsonaro said he would ask Roberto Castello Branco of Petrobras to explain diesel prices in Brazil, which he said he considered high. For much of the video, he criticized Brazil's complicated matrix of federal and state fuel taxes, and said he would push to change the fuel tax regime.

"Tomorrow, a proposal for a fixed ICMS has to come out of the meeting," he said, referring to a state tax applied to fuel.

The government controls the majority of seats on the board of Petroleo Brasileiro SA PETR4.SA, as the company is formally known, but executives insist the firm is free of political interference. Nonetheless, significant contact does occur between the company and political leaders.

The threat of a truckers' strike in recent weeks has led to increased fear of such interference, though the odds of a walkoff appear to have fizzled out. Castello Branco, for his part, said in January that such a strike would not be the company's problem.

In 2018, a truckers strike wreaked havoc on Brazil's economy, leading the government to artificially lower Petrobras' fuel prices, a move that tanked the company's shares and provoked the resignation of the firm's then-chief executive. nL1N2K42UT

While a similar move by Bolsonaro did not appear imminent - and he said Petrobras "cannot suffer interference" - he did not explicitly rule out measures beyond adjusting the tax regime on fuel.

(Reporting by Gram Slattery in Rio de Janeiro and Ricardo Brito in Brasilia; editing by Grant McCool)

((gram.slattery@thomsonreuters.com; 55-11-95057-1453))