Gasoline and ethanol prices skyrocket every day at fuel stations and punch consumers in the pocket, who have nowhere else to run

The price of ethanol continues to rise at fuel stations throughout Brazil, reaching almost R$ 7 in the South region in the country, reveals the survey carried out by the National Agency of Petroleum, Natural Gas and Biofuels (ANP), between the 1st and 21st of this month. According to Mario Campos, President of Siamig, the reduction will reach the pumps in the coming weeks and ease the consumer's pocket.

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The average price of ethanol reached R$ 5,999 in the Southeast region, leading consumers to despair. According to the president of the Association of Sugar and Energy Industries of Minas Gerais (Siamig), alcohol prices soared due to the drought that occurred in the summer.

“Production did not come consistently and, therefore, there was a supply and demand problem that made the price of ethanol rise”, explained Mario Campos.

With the sugarcane harvest period and ethanol production generally within the April-December range, the price of biofuel should be low, but that's not what consumers are seeing at gas stations.

Biofuel value should drop in the coming weeks and relieve consumer pockets

Despite the skyrocketing in the price of ethanol, the executive considers that there was production — albeit lower than that recorded in previous years — and, therefore, prices should soon fall at fuel stations, and ease the consumer's pocket.

“The reduction will reach the pumps in the coming weeks in markets where ethanol is more competitive, such as São Paulo, Paraná and Minas Gerais. However, price parity with gasoline should be less common due to the smaller crop,” he said.

Mario Campos explains that the great villain for the increase in the price of biofuel is not just the drought in the Brazilian summer, but the skyrocketing of sugar in the international market also contributed to the appreciation of ethanol. In other words, with prices on the rise abroad, mills prefer to export sugar rather than produce ethanol.

According to the Foreign Trade Secretariat (Secex), in April, Brazil exported 1,904 million tons of sugar and molasses, 25,67% more than in the same month of 2020, when a total of 1,515 million tons were shipped. tons.

Direct sale of ethanol from plants approved by the CCJ promises to stimulate competition and curb the increase in the price of gasoline at gas stations

It was approved on May 5 by the Constitution and Justice Commission (CCJ) of the Chamber of Deputies, the permission for the direct sale of ethanol from the plants – without going through the distributors, to the gas stations. The new measure can curb the increase in the price of gasoline and diesel, and ease the pockets of Brazilians.

It is still not possible to know exactly how much impact the direct sale of ethanol would generate on the price of biofuel in Brazil, since there is a lot of dependence on industrial logistics in each state. However, a study by Esalq-Log, in 2019, showed that the average cost of transporting ethanol in the state of São Paulo would drop by around 30% with direct sales.

There are also estimates that the concentration of production and distribution margins in the producer and increased competition between mill owners and distributors in the supply of fuel in the market could reduce prices of hydrous ethanol for the final consumer by up to 20 cents per liter.

Gasoline, alcohol and diesel prices keep rising, and deputies refuse to change ICMS amid skyrocketing fuel prices 

Petrobras is 'attacked' for the rise in fuel prices by deputies who refuse to change ICMS in the midst of the crisis caused by consecutive increases in the prices of gasoline, ethanol and diesel.

Brazilians have been suffering on a daily basis with the increase in fuel prices, given that the prices of ethanol, gasoline and diesel keep rising at the pumps. As a measure to try to curb the surges, the Government proposed changes in the taxation of ICMS on fuel. The new proposal was not seen with good eyes by some deputies, who went so far as to accuse the Brazilian oil company Petrobras of being responsible for all of this.