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Brazil trucker protest drags on as diesel tax cuts stall, effects spreading

Thursday, 24 May 2018 10:29 PM [ Last Update: Friday, 25 May 2018 12:11 AM ]

A trucker protest paralyzing swathes of the Brazilian economy stretched into a fourth day on Thursday (May 24) as legislative efforts to cut diesel taxes stalled, raising the prospect of highway and port blockades stretching into next week.

A diesel tax cut rushed through the lower house of Congress late on Wednesday (May 23) lacked the necessary fiscal offsets due to a calculating error, Carlos Marun, the government minister in charge of relations with Congress, told reporters. Senate leaders called a Thursday night meeting to discuss the matter.

The trucking group leading talks with the government, ABCAM, vowed to keep up their protestuntil the tax cuts become law.

ABCAM President José da Fonseca Lopes said participation in the demonstrations had swollen to around a million truck drivers as trucking companies joined the movement kicked off by independent truck owners. He said there were about 330 blockades in 23 of 26 Brazilian states.

Shares of state-led oil company Petroleo Brasileiro SA plunged 14 percent after the firm slasheddiesel prices, raising investor concerns about political interference in its pricing policy.

The toll also mounted in industries from automaking and meat processing to aviation and agribusiness as the protests froze deliveries of fuel, feed and other essential inputs, threatening economic activity and exports of soft commodities. Effects were seen as locally as neighborhood markets, suffering from a lack of fruits and vegetables.

Brazil's top coffee exporter Cooxupé on Thursday warned foreign clients about possible shipping delays due to the truckers' protests.

Sugar mills are also delaying harvesting amid protests due a lack of diesel supplies, sugarcane group Unica said.

Brazil's weak recovery from the deepest recession in decades could be hampered by the protests if they last weeks, according to a senior member of the government's economic team.

(Source: Reuters)

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