Brazil diesel prices cut in effort to halt strike

Brazil Offers Petrobras Compensation For Lower Diesel Prices

"We will not allow hospitals to go without supplies to save lives", Temer said. "We will not allow children to be harmed by the closure of schools".

Amid widespread trucker protests in Brazil against the recent price hikes in fuels, the government has offered Petrobras to compensate it with up to US$274.04 million (1 billion reias) for losses it would incur by cutting the price of diesel.

The association blamed the government for taking so long to respond to trucker complaints that go back to previous year.

On Friday, President Michel Temer authorized the military to use force if need be.

It was unclear whether truckers would start getting off the roads or whether authorities would take action against them, as any showdown could be violent and the removal of thousands of 18-wheelers would be a logistical nightmare.

The hundreds of trucks parked alongside the highways not allowing others trucks through has led to a shortage of fuel and food in several states. The trucker strike is causing significant shortages of material and consumer goods across the country, and several airports are reportedly running low on fuel.

Public schools and universities in several cities called off classes on Friday, and the worldwide airport in the capital of Brasilia announced that nine flights were cancelled, including an American Airlines flight from Miami. Cities in the interior, further away from refineries along the Brazilian coast, have been particularly hard hit.

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Bus and metro services in several Brazilian cities were reduced and several flights, mostly domestic, were cancelled for a third straight day on Saturday.

Under the deal reached late Thursday, truckers would suspend their strike for 15 days to give time to all sides to find a solution. "It doesn't mean the company is changing its pricing policy".

Background: On May 24, Brazil's state-owned company Petroleo Brasileiro temporarily cut diesel prices by 10 percent in an effort to appease truckers who have been protesting since May 21.

One of the unions that helped craft the deal appeared to be distancing itself from it Friday.

But the spokeswoman of the National Transport Confederation (CNT) told journalists Thursday that blockades would continue until the president signes the measure into law.

The work stoppage comes as Latin America's largest economy struggles to move beyond a deep recession and many Brazilians are furious with politicians in the wake of a mega scandal involving kickback scheme between construction companies and elected officials. Unemployment has yet to decline, and the Brazilian real has dropped sharply against the USA dollar over the last few months. The proposal follows a statement from a former government minister who is negotiating with the protesters that the cabinet has offered them adjusted fuel prices on a monthly basis rather than a daily basis, as Petrobras does now.

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