Brazil Plans to Use $3.5-Billion Oil Fund to Bolster Economy | OilPrice.com
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Breaking News:
Brazil looks to boost its economy with money from its $3.5-billion social fund, which collects revenues from oil and gas exploration and production, as approval ratings of President Luiz Inacio Lula da Silva have slumped to a record low.
Inflation and most of all rising food prices have sapped the confidence of Brazilians in their president in recent weeks.
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In the middle of February, a poll by pollster Datafolha showed that approval of Lula’s government dropped to 24% from 35% in December—a record low during any of Lula’s three terms in office as president of Brazil.
The share of people who view Lula’s administration as bad jumped to 41%, up from 34% in December — a record high.
Amid record-low approval, the Brazilian president and his government have now drafted a measure to create a committee to manage the so-called social fund. The fund, created in 2010 to collect royalties from oil, has accumulated $3.5 billion (20 billion Brazilian reals) so far.
The committee will be tasked to decide how Brazil should spend the money. It could use it for general budget purposes or transfer it or part of it into different funds, a finance ministry official told Bloomberg.
While Lula looks to support the economy amid the worst approval rating ever, he defended oil drilling in the Amazon.
Lula is pressuring Brazil’s environmental regulators to approve oil drilling near the mouth of the Amazon River, arguing that revenue from this new fossil fuel supply could help finance a transition to green energy.
“I want it (oil) to be explored. But before exploring, we need to research and see if there is oil and how much oil there is,” Lula said during an interview with radio station Diario last month.
“What we can’t do is stay in this endless chatter that drags and drags—Ibama is a government agency, but it seems like it’s working against the government.”
By Tsvetana Paraskova for Oilprice.com
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