EDIT: CADE downgrade – breaking news

Once upon a time, there was an organization that was impartial in the fuel and oil refining markets. This company – huge and delicate, costs and their inefficiencies that create and deform the entire financial system of the nation it purports to manage – faced a number of lawsuits in which it was accused of anti-competitive practices in these two departments.

Five years ago, the corporation proposed two agreements (technically, cease-and-desist clauses) to its national antitrust authority.

First, it dedicated itself to promoting 50% of its refining capacity. In one, he promised to promote real estate in the fuel sector, which may end his vertical integration in this market. Specifically, the property on offer included the three largest fuel pipelines in Brazil, as well as shares in Gaspetro, the site where the most important company holds shares in fuel distributors in the province.

The importance of these two agreements for the Brazilian financial system was so great that they could be compared to a violation of the nation’s sovereignty. Common Oils in 1911, which produced competitors and spawned various giants corresponding to ExxonMobil, Texaco and Chevron.

A settlement was signed and life went on.

Of the three fuel pipelines, two were offered to major players from around the world, who once again confirmed their trust in Brazil. Gaspetro was offered to a nationwide group wanting to consolidate the industry.

Progress in refining has been very slow: only three of the eight filters have been offered: two market share irrelevant, and the third, Bahia, was offered to a private justice fund.

But in Brazil, a rustic country where even previous places are uncertain, the antitrust authority further adjusts its thoughts at the whim of the then federal government – and lo and behold, pro-market authorities were replaced by pro-national authorities.

And the federal government company came here again for every little thing.

Last week, CADE introduced a settlement change and the transfer of two TCCsit restores the state-owned company to its capital “value”.

In other words, CADE found it necessary to assess its aggressive position and instead adopted a pro-monopoly perspective, taking on the outlandish look of an antitrust group that, instead of representing the buyer, speaks on behalf of giant companies. In quick, dismissive dishonesty.

What’s fascinating is that CADE hasn’t said whether the lawsuits that raised suspicion about the huge company’s very facility (all of which were filed 5 years ago to amend commitments made under the TCC) will now be archived – or whether every little thing can be forgotten.

A strategic investor observing this matter from his workplace in New York, London or Berlin will come to the conclusion that each of us already knows: Brazil is simply not a place of free competition, and the fundamentals change regularly.

In addition to currently strengthening autonomy (which makes production chains more expensive), this exchange of information between management will be of additional value. If and when the next president – ​​or a subsequent SOE administration – decides to resell refineries or fuel pipelines, who will dare to make an offer?

In addition to being pro-monopoly, CADE’s position is the opposite. While all major economies need to position themselves in the era of synthetic intelligence, the “aggressive boss” appears to be subservient to those who see Brazil as trying to put itself in the rearview mirror.

Brazilian daily