Brazil Close to Paralysis as Truckers Press on with Strike

Brasilia, May 25 (AFP) The Brazilian government and transport unions struck a deal late yesterday to halt for 15 days a nationwide truckers' strike that has caused severe shortages of fuel and food in some areas.

The union heads "commit to suspending the strike movement for 15 days, when a new meeting with the government will be held," announced President Michel Temer's chief of staff Eliseu Padilha, on the night of the fourth straight day of road blockades that threatened to paralyze the vast South American country.

After seven hours of negotiations, the government pledged to abolish at least one tax on diesel and implement subsidies to maintain a temporary 10 percent fuel price reduction announced Wednesday by state oil company Petrobras.

Truckers had attempted to put a stranglehold on movement of goods in Brazil to protest fuel price hikes -- blocking main roads in 26 of the 27 states in the large country, which has only limited rail services.

Earlier yesterday, airports and gas stations were running out of fuel, food prices were spiralling and agricultural exports were hit.

The increases are the result of a politically sensitive decision made in late 2016 to allow the Petrobras oil giant autonomy over its pricing, as well as a rise in world prices in recent weeks.

But the determination of the truckers caught center-right President Michel Temer's government flat-footed, five months ahead of presidential elections.

As a way of defusing an increasingly out-of-control situation, Petrobras yielded to pressure on Wednesday and reduced fuel prices for 15 days, sending its shares plunging by around 14 percent on the Sao Paulo stock market by close yesterday.

In the port of Santos near Sao Paulo -- the largest in Latin America -- there were virtually no arrivals or departures of trucks for three days, the management said, even if the "loading and unloading operations of ships continues normally" for now.

In the capital Brasilia, the airport was allowing only planes to land that had enough fuel to take off again, and schools were closed.

At five other airports, including Recife in the northeast and Congonhas in the economic capital of Sao Paulo, fuel reserves could run out yesterday, the G1 news site said.

Various abattoirs have also halted operations, affecting a key export sector.

Prices of fruits and vegetables were rocketing in some places to 400 per cent, due to supply problems.

Pump prices were also higher, and long lines formed at many gas stations. A spokeswoman for Rio's fuel retailers' union Sincomb told AFP that the main service stations were last supplied on Monday.

"There is a lack of fuel in practically all the service stations that we have contacted," she said.

The movement appeared to have some popular support.

"I think that this has been provoked by poor management by the federal government," said Ana Maria Lobo, a driver waiting in line at a gas station in Sao Paulo, who also noted "all these corruption scandals."

As a temporary measure ahead yesterday's agreement, the lower house of congress had decided late Wednesday to suspend the introduction of two taxes on diesel until the end of the year -- a proposal that sparked government tensions. Head of the Abcam truckers' association, Jose de Fonseca Lopes had said the strikes would end if the Senate approved the suspension yesterday.

But the spokeswoman of the National Transport Confederation (CNT) had insisted that blockades would continue until the president signs the measure into law. (AFP) KIS

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