• Wednesday, Sep 26, 2018
  • Last Update : 04:11 pm

Brazil hopes for end of truck strike on eighth day

  • Published at 08:47 pm May 28th, 2018
2018-05-28_BRAZIL-TRANSPORT
Army officers escort trucks transporting fuel on the BR-116 highway in Canoas, Porto Alegre, Brazil May 28, 2018 Reuters

Truckers are angry over the rise in costs from 3.36 reais a liter in January to 3.6 reais before the strike. On May 26, it hit 3.8

A truckers' strike paralyzing fuel and food deliveries across Brazil entered an eighth day Monday but with hopes of relief after unpopular President Michel Temer caved in to the strikers' key demand.

Road blockages by truckers remained in place across 21 of the country's 27 states, G1 news site reported.

Although there has been some improvement since the army was ordered to intervene Friday, with armed soldiers escorting fuel trucks on priority routes, enormous lines continued to form at gas stations.

Many supermarkets still struggled to source fresh food and there were eight airports reporting Monday that they were out of aviation fuel. Hospitals in Rio de Janeiro had to cancel non-urgent surgeries and a key commuter system in the city, the BRT, operated at only 22% capacity.

But after agreeing Sunday to slash diesel prices, the government says the crippling standoff will now wind down.

"The expectation is that the demonstrations will end and the truckers will return to work today," said Temer minister Carlos Marun on CBN radio. "There are still some blockades but the protest strike has been resolved."

According to Marun, those still resisting represent "an anarchic, radical movement which we believe will not succeed."

Truckers are angry over the rise in costs from 3.36 reais a liter in January to 3.6 reais before the strike. On May 26, it hit 3.8.

After urgent negotiations with representatives of the truckers, Temer agreed to cut the diesel price by 0.46 reais a liter for 60 days.

That concession hammered the value in state-controlled oil major Petrobras, one of Brazil's most dominant companies. Shares dropped eight percent Monday and 14% last Thursday.

Unpopular president's austerity plan

The crisis has exposed the surprising fragility of Latin America's biggest economy and put Temer's lame duck administration on the defensive ahead of October general elections.

Temer took power in controversial circumstances in 2016, following the impeachment and removal from office of his leftist predecessor Dilma Rousseff for breaking budget rules.

Temer's market-friendly centre-right government then launched into sweeping austerity reforms that have been widely praised by investors as a bid to return Brazil to fiscal health, but proved hugely unpopular with ordinary Brazilians.

Approval ratings for Temer and his government are in the single digits, despite officials' claims that the reforms have helped bring Brazil slowly out of a deep recession.

The current row over fuel is part of that wider conflict, with costs rising significantly since Temer's politically sensitive decision in late 2016 to allow Petrobras autonomy over its pricing. The rise in world oil prices in recent weeks has also been a factor.

Brazil is a member of the G20 group of the world's largest emerging and advanced economies. The first five days of the strike were estimated to have cost $2.8 billion, according to the daily Folha de Sao Paulo.