Pros and Cons of Brazil-Bolivia Accord
All eyes focus on the agreement to readjust gas prices reached Thursday by Presidents Luiz Inacio Lula da Silva (Brazil) and Evo Morales (Bolivia).

This agreement was strongly criticized by the Brazilian opposition.

Brazilian Liberal Front deputy Jose Carlos Aleluya considered it a sample of government policy "fragility", and accused the government of having given in to foreign pressure.

Social Democrat Julio Redecker said it will cause serious damage to Brazil and said he would go to the Federal Supreme Court (STF).

Financial analyst Felipe Cunha (Banco Brascan) said the agreement will have an effect on the perception the market has of Brazilian oil enterprise PETROBRAS.

However, for others, like Brazilian Mining and Energy Minister Silas Rondeau, political expert Marcelo Coutinho and PETROBRAS president Sergio Gabrielli, the agreement was positive and constitutes a correct strategy for Brazil.

Brazilian energy expert Marco Tavares agreed saying that additional expenses could be restored, if a unit able to separate components such as methane, ethane, propane and butane is created.

Brazil increased the price of gas supplied by Bolivia to the Brazilian state of Mato Grosso from 1.19 to 4.2 dollars each British Thermal Unit million of the 2.8 million cubic meters of gas that Bolivia will supply Mato Grosso.

Lula announced Brazil is studying new investments in Bolivia, including a bi-national hydroelectric plant, a biodiesel plant and investments in the chemical industry.

The chemical industry investment will allow separating gas components and PETROBRAS will be able to sell them separately, collecting adjusted prices.