Brazil's President concedes to striking truckers' demands after week-long work stoppage
By Marcia Reverdosa, Flora Charner and Susannah Cullinane, CNN
Updated 2:15 AM ET, Tue May 29, 2018
Sao Paulo (CNN)Brazil's President has announced he will concede to truck drivers' demands after a week-long strike that has paralyzed much of the country.
Truckers angry at rising fuel prices have blocked major roads across Brazil since May 21, preventing the delivery of goods to supermarkets and gas to petrol stations.
Citing concerns about lack of medicine and basic goods, President Michel Temer said Sunday that his government would subsidize the cost of diesel for the next 60 days, exempt empty trucks from tolls and introduce a minimum freight fare for truckers.
Temer said diesel prices at the pump would be cut by 0.46 reals per liter (roughly $0.13) for the next two months. He said prices would increase just once a month after that. Prices had risen to 3.6 reals ($0.98) per liter before the strike, with five increases in the week before truckers took action.
The government would pay state-run oil company Petrobras the difference in price, Temer said in a televised address from the presidential palace in Brasilia.
On Thursday it had looked like the strike action was drawing to a close after Brazil's government said it had reached an agreement with truckers' unions to eliminate some taxes on diesel, while Petrobras agreed to lower the price by 10%.
But truck drivers continued to block roads, saying they wouldn't move until Brazil's Congress had approved the tax changes and Temer subsequently announced that the Armed Forces would be deployed to clear the blockades.
The government said its security forces were escorting fuel trucks to key infrastructure such as hospitals.
"The government was always open to dialogue and we were able to sign an agreement with the leaders of this movement," Temer said Sunday. "We spent the week trying to meet the truckers' grievances, but we were also worried about all the Brazilians that faced difficulties these days."
"We understand the natural difficulties truckers endure in their jobs, but we became increasingly worried by what was happening in the health sector. We received incredibly worrisome statements here regarding the lack of medicine and basic goods," he continued.
The measures announced by Temer Sunday were published in the government's Official Diary.
According to web portal G1, this was one of the prerequisites made by the truckers' union in order to end the strike.
"If it's in the Official Diary, our recommendation is for the concessions to be accepted," Autonomous Freight Transporters Union (Sinditac) president Carlos Alberto Dahmer told G1.
Political Affairs Minister Carlos Marun said that subsidizing diesel would cost the federal up to 10 billion reals (roughly $2.7 billion).
The strike has choked Brazil's economy, with Sao Paulo, Brazil's largest city and financial hub, declaring a state of emergency Friday.
Many of the city's petrol stations had already run out of gas by the weekend and there were long lines at others, journalist Shasta Darlington reported on CNN's "Quest Means Business" programfrom Sao Paulo Friday.
The city cut its bus services by half Saturday and expected to stop them entirely by Monday night as fuel stocks ran out, a city hall spokesperson said. Trash collections in the city had also been suspended.
Local governments in many other cities reduced public transport to conserve fuel. In Rio de Janiero less than a fourth of normal bus services ran Saturday, a city official said. Food in public schools was only guaranteed until Monday, according to Rio's City Hall.
Meantime eight airports run by state airports authority Infraero were without fuel late Sunday, the operator said in a statement.
Hospitals are operating with limited inventory and as of Saturday only six had adequate supplies to ensure health care for four days, Marun said, according to a government statement.
Marun said the President was concerned about the possibility of loss of life and the government was "doubling down on the application of fines against truckers with medical cargo."
In 2016, Petrobras announced it was changing its pricing policy and would adjust its diesel and gas prices relative to the global market. Crude oil prices have soared this year, with consumers impacted at the pumps.
Brazil's Federal Union of Oil blamed the increase in prices on measures taken by the government that aimed to "dismantle Petrobras."
The blockade comes just months before presidential elections set for October. Temer replaced Dilma Rousseff as Brazil's president after she was impeached in 2016.
One poll by Datafohla in April suggested 70% of respondents disapproved of Temer's government and just 6% approved of his leadership.
Temer has said he is not running for reelection. A number of presidential candidates, from both right and left-wing parties, have also spoken out in support of the striking truckers.
Journalist Marcia Reverdosa reported from Sao Paulo, Flora Charner wrote from Atlanta and Susannah Cullinane wrote from Auckland, New Zealand.