With a focus on re-election next year, Mr Bolsonaro, a former army captain who has publicly said he knows nothing about the economy, nominated a military man to the helm of the company after the current chief executive refused to lower fuel prices.

Petrobras said Tuesday it will schedule meeting to assess presidential nominations of a new CEO.

“It is now clear that the president himself is not as committed to a liberal economic agenda as the public once thought, even though his finance minister does,” said Bernard Appy, former secretary of economics at the ministry.

Guedes, a 71-year-old investment banker who only entered politics in 2019 when Bolsonaro took office, has remained silent since the president on Friday night appointed General Joaquim Silva e Luna as CEO of Petrobras. Mr Bolsonaro and Mr Guedes declined requests on Wednesday for comment.

A person close to the minister said the economist who graduated from the University of Chicago had no intention of leaving Bolsonaro.

The minister knows that his exit will only scare investors even more, and he still believes he will have the opportunity to undertake a series of reforms to improve Brazil’s business environment, such as simplifying the country’s Byzantine tax system and introducing new rules to curb government spending, said a familiar person. with ministerial thoughts.

“Of course he is not happy with what happened [at Petrobras], “Said the man, adding that the minister felt less responsible for oil producers than other areas of the economy because it was under the scope of the ministry of mining and energy.

Brazil’s Minister of Mines and Energy, Bento Albuquerque, an admiral in the Navy, said in an interview that the government was simply seeking greater stability in fuel prices, denying that it would intervene or force Petrobras to pay subsidies.

“It is the president’s prerogative as controlling shareholder to appoint whoever he wants,” he said, adding that the government was studying ways to avoid sharp swings in fuel prices, including creating funds that could be announced in two months.

In an interview with The Wall Street Journal in October, Guedes described how he had long planned to venture into politics, his hopes were high for what he could achieve.

Co-founder of Latin America’s largest investment bank, BTG Pactual, Guedes says he has been inspired by the likes of Ronald Reagan and Margaret Thatcher to reduce the size of Brazil’s swelling government.

“We will give up market power,” said Guedes, defending the president.

“Bolsonaro really wants to change the country,” he said. He explained that he sees Bolsonaro’s government as an alliance of liberal and conservative economies and is the country’s best bet to decide the way of the two left-spending presidents who have preceded Bolsonaro.

The support of Mr Guedes during Mr Bolsonaro’s election campaign was critical to getting votes from centrists and business leaders, sealing a conservative victory.

But the others saw Mr. promise. Guedes as unrealistic and naive, shows the mentality of a business leader who has never worked with politicians before.

“He created expectations of a liberal revolution that he never had the means to carry out,” Luiz Carlos Mendonça de Barros, former head of Brazil’s state bank BNDES, told the Folha de S.Paulo newspaper. We watched and laughed, anyone who has experienced the boundaries of politics knows what I mean.

Mr. Government. Bolsonaro is off to a good start in the eyes of investors. In its first year in office, the country went through a long-awaited overhaul to downplay Brazil’s generous pension system, which is estimated to have saved public accounts an estimated $ 200 billion over a decade.

The president filled his government with market-friendly figures, appointing another Chicago alumni, Roberto Castello Branco, as chief executive of Petrobras. Meanwhile, Guedes set his sights on the privatization of hundreds of state-owned companies, from banks and power companies to the state postal service.

Slow progress. Then the pandemic hit.

Covid-19 has hit Brazil, killed a quarter of a million people, and sparked widespread criticism of Mr crisis management. Bolsonaro. Faced with growing demands from political opponents for his impeachment, the great leader returned to the populist movement to please his political base – a strategy analysts say marked his nearly three decades as a congressman.

If successful, Bolsonaro will ensure his short-term political viability and increase his chances of being re-elected in next year’s presidential election, political scientists say.

Bolsonaro issued a presidential decree to loosen gun ownership rules with a nod to his conservatives, while supporting a program of generous payments for the poor. Mr Guedes, seeking to safeguard the country’s fiscal health, has suggested paying less than $ 40 a month per person; the government has tripled that figure.

After spending as much as $ 10 billion a month on payments during last year’s pandemic, the country is preparing to resume payments in the coming weeks. Brazil released figures on Wednesday showing its public debt hit a record in January, rising to an estimated $ 930 billion.

But many investors see Bolsonaro’s nomination of Petrobras as the boldest move, contradicting his administration’s promise to reduce the size of the country in the economy and the president’s own promise to let the country’s oil companies set prices according to international markets. .

On Monday, on the first full trading day following Mr Bolsonaro’s candidacy for General Silva e Luna, investors fled Petrobras, wiping out about $ 13 billion from the company’s market value, the second biggest daily loss for the company since the 1990s.

The candidacy followed a dispute between Bpk. Bolsonaro and the current CEO of Petrobras are concerned about rising fuel prices, fueling concerns that the president intends to force companies to fund fuel subsidies in the country again – policies that cost around $ 30 billion between 2011 and 2016 under leftist administration.

While oil producer stocks have recovered since then, economists say it will take a long time to repair the damage to the reputation of companies and countries.

“Who is a Brazilian or foreign investor who wants to buy Petrobras shares?” said Maílson da Nóbrega, a Brazilian economist and former finance minister who praised Guedes for his optimism. “I thought [Mr. Guedes] hopes that he can push for reforms and leave his legacy, but it is becoming increasingly difficult. “

—Jeffrey T. Lewis contributed to this article.

Write to Luciana Magalhaes and [email protected] and Samantha Pearson at [email protected]