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Negotiations to End Brazil Oil Strike Stall; Two Biggest Refineries Halt

September 29, 1994

RIO DE JANEIRO, Brazil (AP) _ Talks to end a nationwide oil workers strike stalled Thursday and employees of Brazil’s two largest refineries joined the work stoppage.

Union officials said they were close to an agreement on working conditions with the state oil monopoly Petrobras, but that the talks halted when the company insisted the strike should end before any accord was reached.

″That wasn’t acceptable, so the strike goes on,″ said Sergio Pereira dos Santos of the national strike command. Petrobras declined comment.

A federal labor court is to rule Friday on the legality of the strike.

The government is confident the court will order the employees back to work, but in past strike, workers have refused to comply with the court’s orders.

The labor court on Tuesday ruled that 30 percent of the union’s members should continue working to maintain equipment and minimum supplies, but workers ignored that order.

Strike leaders say 92 percent of Brazil’s 55,000 petroleum workers remain on strike. The walkout began at midnight on Monday.

The union wants a 108 percent pay raise to compensate for inflation, as well as job stability and the reinstatement of workers fired during an anti- inflation plan in 1990.

Petrobras has offered a pay increase of 13.4 percent.

Dos Santos said the union was open to a one-time bonus. He said union officials believe that some Petrobras directors favor such a solution, but that the government opposes the idea.

The strike is the first major test of the government’s resolve on the ″Real Plan,″ an anti-inflation program implemented in July that has reduced inflation from 50 percent in June to 1 percent this month.

The government fears that granting a large raise would spur similar demands from workers in other state industries and prompt a return to ″indexation″ - pay increases that match inflation.

Meanwhile, all 1,100 workers of the Replan refinery at Paulinia in Sao Paulo state walked off the job on Thursday. The plant handles 25 percent of the 1.4 million barrels of oil processed at Petrobras’ 10 refineries.

At the Cubatao refinery, Brazil’s second-largest, union members were meeting Thursday to make arrangements to stop production by mid-afternoon, the union said.

Production of crude and refined products has dropped 70 percent nationwide, according to union estimates. Petrobras oil wells normally produce 750,000 barrels of crude a day, according to company figures.

Petrobras says its fuel and gasoline stocks for domestic use will last seven to 27 days. Strike leaders say production units will be reactivated to ensure a basic level of supply in all product areas.

″It’s not our intention to make anyone suffer from shortages,″ dos Santos said.

On Wednesday, Petrobras suspended exports of refined petroleum products to the United States, Asia and Africa.

Brazil exports about 50,000 barrels of gasoline a day to the United States and 25,000 barrels a day to Asia and Africa. It also exports 75,000 barrels a day of ship fuel, diesel oil and fuel oil.

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