• Categories
  • Archives

Brazil Ethanol Has Become too Expensive to Compete with Gasoline

Ethanol and gas in Brazil Brazil’s Única, the sugarcane grower and mill owner association, tells us that over the last five weeks prices paid to its members have fallen an average 16.7%. However, as drivers know, the price drop at the pump has been practically zero. Well, Única says it fell an average 1% during the same period.

“In São Paulo,” says Antonio de Padua Rodrigues, the Única technical director, “producer prices have fallen 24 centavos per liter, while the price in the gas station only fell 2 centavos per liter.”

Rodrigues says the delay in passing the reduction on to the final consumer is harmful to the competitivity of ethanol vis-à-vis gasoline. And he adds that the probable explanation for what is happening is that distributors are making more money as they pass the reduction to their profits column.

Meanwhile, a survey by Agência Brasil has found that based on prices reported by the National Petroleum Agency (ANP) between February 21 and 27, at the moment it is economical to use ethanol in only two states: Goiás and Mato Grosso.

The reason for this is that there is what is known as an “energy density” difference between ethanol and gasoline. In the case of Brazilian sugarcane-based ethanol, the difference is 30% – which means you get 30% less mileage with ethanol than with gasoline.

So, in Brazil the price of ethanol cannot be more than 70% the price of gasoline to be a good buy. And it has not been a good buy since December when ethanol began rising, costing over 80% of the price of gasoline in some locations.

According to Única and the government, the main reason for the spike in ethanol prices at the end of last year was excessive rainfall that caused a harvest shortfall of more than 10%.

ABr

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

The Classic Brazilian Tunes That Keep the World Turning On

Usually around the close of the old year, or near the beginning of a ...

Private Colleges Open 82,000 Places for the Poor in Brazil

Of Brazil’s 1,652 private higher education institutions, 1,001 have already adhered to the University ...

Poor Transport Is Killing Brazil’s Industry

Brazilian foreign trade figures could not be better. Brazilian participation in global export has ...

Brazil Shrinks 3.5%, Worst Decline in 13 Years

The economy of Brazil suffered the worst decline in more than a decade in ...

Brazil’s Lula Apologizes. Ally Says He Knew All. Impeachment Is on the Cards.

Brazilian President Luiz Inácio Lula da Silva apologized Friday, August 12, in a nationwide ...

Meeting of Portuguese-Speaking Countries Discuss Politics and Spelling

The 10th Regular Meeting of the Council of Ministers of the Community of Portuguese-Speaking ...

Fourteen Brazilian Women in a Book

I asked Prof. Szoka about the various typos throughout the book. She said that ...

The Tough Questions Brazil’s Lula Refused to Answer

With an advantage in the polls that seems insurmountable, being the numbers so expressive ...

Thanks to a 50% Hike in Beef Prices Brazil Exports 22% Less and Earns 18% More

From January to August, Brazil's beef exports fell 22% year-on-year to 711,716 tons swt ...

Dirty Pics

Are the pornographic pictures just a crass photo montage? The police of Ribeirão Preto ...