Brazilian Oil Workers Prepare for 5-day Strike on October 19

Brazilian oil workers could start a five-day nationwide strike on October 19 if federal energy company Petrobras (NYSE: PBR) does not improve its latest salary increase proposal, the federation of oil workers' union FUP said in a statement.

The stoppages would affect production, unlike the 24-hour protest strikes that workers have been holding in the past week while negotiations with Petrobras management have been ongoing.

On October 8, Petrobras management offered a 12.1% salary increase for active workers, a 17% increase in luncheon vouchers and an increase of benefits to workers' families. It also said it would conclude a career structure proposal in 18 days, the management said in a statement.

"The proposal includes a salary increase above the 7.81% inflation in the last 12 months," the company said in a statement. "The last salary increase above inflation had been granted in 1994."

However, the FUP recommended that unions reject the proposal, claiming that the offer is below their salary-hike pledge. Workers want a 13.2% increase extendable to some 60,000 retired workers, as well as career plans and an upheaval of current retirement programs.

Petrobras said that it would announce a new retirement plan for its workers by October 29 after studying "sustainable changes" with Petrobras' oil workers pension fund Petros.

Petrobras and its units BR Distribuidora, Transpetro, and refinery Refap employ 54,880 people in Brazil and abroad, and 17,081 of them work in exploration and production, Petrobras said on its webpage.

The last enduring dispute between Petrobras management and its workers was a 32-day strike in 1995 that ended with army occupation of four refineries after Brazil's top labor court ruled the strike illegal.

The oil workers' strike comes as employees in other sectors such as banks and steel production are also striking for better wages in the wake of economic recovery.