After Petrobras Succumbs to Government Pressure and Ethanol Evaporates at Mills, Gasoline, Diesel, and Ethanol Prices Plummet at Gas Stations, Easing the Consumer’s Burden This May

Rio Grande do Sul Has The Lowest Prices For Gasoline (R$ 5.159) And Diesel (R$ 5.048); Ethanol Is Financially Advantageous In Mato Grosso

After Petrobras yields to pressure and changes its fuel pricing policy, the month of May ends with gasoline prices 3.26% lower at fuel stations in Brazil, with an average value of R$ 5.463 per liter. Additionally, the prices of hydrated ethanol and diesel S-10 were reduced by 3.49% and 3.67%, respectively.

“In the last week, gasoline prices dropped for the third consecutive week as a consequence of the reduction in the price of anhydrous ethanol at production plants and, primarily, as a reflection of the decrease in gasoline prices at refineries,” says Brendon Rodrigues, Head of Innovation and Portfolio at ValeCard. “In the coming weeks, consumers may experience price fluctuations, as from June 1, there will be an increase in the ICMS value on gasoline and ethanol.”

According to the CEPEA/ESALQ indicator, the price of anhydrous ethanol, which makes up 27% of the common gasoline sold in Brazil, at the production plants in São Paulo has fallen by 13.58% since May 1. In turn, as the first measure of Petrobras’s new pricing policy, on May 16, the company announced a reduction of R$ 0.40, or 12.6%, in the price of gasoline per liter at refineries.

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Rio Grande do Sul Has The Cheapest Gasoline In Brazil

Rio Grande do Sul has the cheapest gasoline in the country, at R$ 5.159; Acre and Amazonas lead in price reductions, with decreases of 5.51% and 4.21%, respectively.

The data from the fourth week of May 2023 show that the states that recorded the largest decrease in gasoline prices were Acre (-5.51%), Mato Grosso (-4.28%), and Amazonas (-4.21%). In contrast, Amapá (0.10%) was the only state that registered a price increase.

Considering the average prices practiced in the states, the highest value was recorded in Roraima (R$ 6.640); the lowest average value was R$ 5.159, in Rio Grande do Sul.

See below the details of the national fuel price survey by ValeCard, a company specializing in fleet management solutions, based on transactions conducted in approximately 25,000 fuel stations across Brazil.

Ethanol Evaporated At The Plant And Price Fell 3.49% In The Fourth Week Of May, With A National Average Of R$ 3.894 Per Liter

Between May 22 and 28, 2023, the average price of hydrated ethanol (used directly by vehicles) in the country was R$ 3.894 per liter, representing a decrease of 3.49% compared to the previous week when the average value was R$ 4.035. This information comes from an exclusive survey conducted by ValeCard, a company specializing in fleet management solutions, based on transactions made at more than 25,000 accredited establishments in all states of Brazil.  

“This was the third consecutive week of falling prices for hydrated ethanol, which can be explained by the gradual pass-through of this fuel’s reduction at production plants,” says Brendon Rodrigues, Head of Innovation and Portfolio at ValeCard. “Between May 1 and 19, the production plants in São Paulo reduced the price of hydrated ethanol by 17.93%.”

The data is from the Center for Advanced Studies in Applied Economics at Esalq and shows that the prices of hydrated ethanol at SP plants have continued to fall in the first three weeks of May. However, in the last week, there was an increase of 2.69%.

According to ValeCard, in order for the use of hydrated ethanol to be financially advantageous compared to gasoline, discounting factors such as individual vehicle ranges, the price of the renewable fuel per liter must be equal to or less than 70% of the price of the fossil fuel per liter.

Considering this methodology, in the fourth week of May it was worth refueling with ethanol in Mato Grosso, where the ethanol price was equivalent to 66% of the gasoline price, respectively.

Comparison Between Gasoline And Ethanol Prices