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Brazil's independent truckers call for July 25 strike over high diesel prices

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Platts Global Alert - Oil

Brazil's independent truckers call for July 25 strike over high diesel prices

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Pandemic undermines support for strike

Divisions remain between trade groups, unions

Rio de Janeiro — Independent truckers across Brazil have called a for a strike on July 25 to protest against the high diesel prices. This comes even as the country's ongoing battle against the coronavirus undermined support for the strike, amid divisions between trade groups and unions that make up the group.

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Brazil's National Council for Highway Cargo Transport, or CNTRC, called for an end to state-led oil company Petrobras' policy of maintaining domestic prices at parity with international imports and enforcement of freight tables introduced after a May 2018 truckers' strike. The Parana state-based CNTRC is leading the planned walkout.

The CNTRC was agitated after Petrobras implemented diesel and gasoline price hikes on July 6. The increase was announced shortly after Petrobras CEO, Joaquim Silva e Luna, opened dialogue with CNTRC and other groups that represent truckers.

Although Silva e Luna agreed to evaluate the company's pricing policy, he has publicly supported the measure on many instances.

The latest call for action, however, lacks the widespread support seen in the May 2018 strike, which was led by the Brazilian Truckers' Association, or ABCAM. The 10-day walkout had led to shortages of food, fuel and medicines across Brazil.

ABCAM said on July 13 that the group had not supported the strike yet.

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The Brazilian Association for Motor Vehicle Conductors, or ABRAVA, would meet on July 23 to determine whether it will join the walkout. The outcome of this meeting was not known at the time of writing. The National Confederation of Independent Transporters, or CNTA, said that its drivers would be allowed to decide whether or not to adhere to the strike.

The Ministry of Infrastructure downplayed the CNTRC-led walkout. The ministry said on July 21 that the CNTRC wasn't a "representative-class entity" for independent truckers and that any declaration made by the group only represented the "isolated position" of its members.

The uncertainty surrounding the walkout reflected Brazil's ongoing battle against the coronavirus, which had claimed the lives of nearly 550,000 Brazilians. A similar walkout in February, when the country was headed toward a second-wave of the pandemic, failed to generate momentum after truckers opted against joining the walkout.

The larger National Confederation of Transport and Logistics Workers, or CNTTL, led the February walkout. The CNTTL, which represents about 800,000 independent truckers, will adhere to the July 25 strike, the entity said on July 22.

The lack of support came as a surprise given controversial comments made by then-Petrobras CEO Roberto Castello Branco, who blamed the truckers' woes on bad highways and an oversupply of trucking capacity, market sources said.

President Jair Bolsonaro had backed independent truckers during the May 2018 strike and enjoyed support from the group during the polls later that year. While he has taken the truckers' complaints seriously, Bolsonaro has warned that truckers will be fined heavily for disrupting commerce and blocking roads.

The average price for a liter of diesel stood at $0.8724 for the week ended July 10, according to Brazil's National Petroleum Agency. Petrobras last raised diesel prices on July 6, when diesel at the refinery gate rose 3.8% to an average of $0.5414/liter.