President Fernando Henrique Cardoso of Brazil has decided that the state-owned oil company Petrobas has been pampered silly and needs to be disciplined. He proposes to do so by selling it off to private investors, arguing that till now the firm's only contribution has been to augment the state's federal deficits.

The sullen Petrobas employees have retaliated by going on a strike from May 3, throwing the nation in a state of utter confusion. All but one of the 11 oil refineries came to a grinding halt, fuel stocks dwindled and kitchens were bereft of cooking gas following the strike.

But Cardoso, refusing to be bullied by the oil workers, has deployed the army to tackle the situation. Now the soldiers have taken over the refineries in the 2 industrialised states, Sao Paulo and Parana. Meanwhile the government is scrambling to cover the shortfall with imports and alternative fuels.