SAO PAULO, May 22 (Reuters) - Afranio Sobrinho has one of the most unpopular jobs in Brazil.
As the head of the Guarulhos water utility SAAE, Sobrinho turns off the taps every other day in this industrial suburb of 1.3 million people just outside Sao Paulo to cope with a dwindling water supply caused by the worst drought in 80 years.
"Rationing is unpopular," says the soft-spoken, affable 53-year-old engineer, adding that residents are understandably resentful of the measure. "But you have to think of this as managing your money - you can't live off your savings forever. And our savings are almost gone."
Officials elsewhere in South America's largest metropolitan area, however, are not being so cautious. Sao Paulo's main reservoir fell last week to an all-time low of 7.8 percent of capacity, raising the specter of a water shortage in a country with the world's largest fresh-water reserves.
Yet state authorities have resisted calls to extend rationing to the rest of this sprawling metropolis of 20 million, fearing a political backlash as Brazil gears up for the soccer World Cup next month and elections in October.
Instead, state water utility Sabesp is spending lavishly on a TV and radio campaign urging people to take shorter showers and to turn off the taps when washing dishes. It is also pumping muddy reserves from the bottom of the reservoir, hoping that will keep water flowing until the election, which is when the rainy season starts.
State officials insist that city-wide rationing won't be needed, and that even without significant rainfall, there is enough leftover water in the reservoir to get through the year.
"We will get through the dry season," Governor Geraldo Alckmin said last week at a ceremony to start pumping the reservoir's emergency reserves. "We are working 24 hours a day to guarantee supply."
Others fear the situation is more critical than officials acknowledge, and worry that taps could go dry around October if it doesn't rain.
"Because we are heading for an election, addressing these issues in a transparent way is obviously a problem," said Mauricio Colin, head of Ciesp, a local industry group.
"Politics are involved. You can't say everything is under control when water levels are under 9 percent."
Sao Paulo's water woes come at a tough time for Brazil, which is grappling with a sluggish economy, high inflation, rising energy costs and poor infrastructure. Given Brazil's heavy reliance on hydro power, the dry spell is also fueling fears of blackouts.
This year saw the driest summer on record in Sao Paulo state, a region struggling to keep up with fast demographic growth. Parts of the Cantareira, a reservoir 25 times the size of Manhattan's Central Park, now resemble a lunar landscape.
The water crisis could prove costly for the Brazilian Social Democracy Party, or PSDB, which has governed Sao Paulo state for almost two decades and is the main opposition party to President Dilma Rousseff's Workers' Party.
An economic powerhouse that accounts for more than 30 percent of Brazil's gross domestic product, Sao Paulo state is a key battleground in national politics. Rousseff and her allies have sought to use the water crisis to weaken Alckmin and the PSDB, accusing them of failing to invest enough to diversify Sao Paulo's water sources.
In Guarulhos, residents are angry that they have to endure rationing while wealthier areas of Sao Paulo are spared.
"Our politicians have no shame," complains hairdresser Milka Fagundes, adding that the rationing often forces her to turn clients away. "I feel like crying."
With or without rain, experts say Sao Paulo desperately needs to reduce water consumption to prevent a repeat of the current crisis.
"Once that reserve is gone there is nothing else left but praying for rain," said Benedito Braga, president of the World Water Council. "We can't increase supply. The only solution is to save as much water as possible."
Draining the reserves at the bottom of the reservoir could also leave 5.5 million people around the dam without a drop and hit industrial production in a region that houses companies like beverage giant Ambev, steelmaker ArcelorMittal , Nivea, Sherwin Williams and Unilever.
Experts say there were plenty of warning signs. Last December, a group monitoring the levels of the Cantareira urged Sao Paulo to start rationing to avoid what they described as "hydric stress."
"They were alerted, but nothing was done," said Francisco Lahoz, head of Consorcio PCJ, the group that monitors reservoir levels. "They should have taken more drastic measures without waiting to reach to this point." (Editing by Todd Benson and Kieran Murray)