Brazil's Haddad backs Petrobras ability to set fuel prices above cost

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SAO PAULO (Reuters) - Brazil leftist presidential candidate Fernando Haddad said on Thursday that state oil firm Petroleo Brasileiro SA should be allowed to set prices above cost, breaking from former party policy.

Between 2010 and 2014, former administrations of Haddad’s Workers Party (PT) forced Petrobras, as the firm is commonly known, to keep its fuel prices down as part of a bid to control inflation, which drained the world’s most indebted oil company of billions of dollars as oil prices climbed.

But Haddad said on Thursday that Petrobras should not be used as a tool to combat inflation, although it should also not be given complete autonomy.

“I’m against using Petrobras to combat inflation. Petrobras is a company, it has shareholders,” said Haddad, speaking to a group of foreign correspondents.

Haddad recently replaced former President Luiz Inacio Lula da Silva, who cannot legally run due to a corruption conviction, as the PT’s official candidate.

Although his support is likely to rise with Lula’s backing, Haddad was in fifth place in a major opinion poll released on Tuesday, with 8 percent of the vote.

If no candidate wins a majority in an Oct. 7 first-round vote, as is likely, the top two vote getters will advance to a runoff. Right-wing Congressman Jair Bolsonaro is currently leading in the first-round, and will likely face a centrist or leftist opponent in the second round.

Reporting by Eduardo Simoes; Writing by Gram Slattery, Editing by Rosalba O’Brien