High prices of ethanol and gasoline and social isolation make demand for fuels plummet in Brazil, the opposite of diesel, which had a surge supported by sectors such as agriculture and transport

The crisis caused by the coronavirus, which led to mobility restrictions, in addition to the rise in fuel prices, caused the demand for ethanol and gasoline to plummet in Brazil in March. Diesel, on the other hand, despite having been suffering increases even with the PIS and Cofins taxes, frozen by the Government, had a completely opposite behavior due to the sustained demand by sectors such as agriculture and transport.

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The above information comes from the S&P Global Platts Analytic Latin America Oil Report. Also according to the survey, the average consumption of hydrated ethanol was 325 thousand barrels per day in March, which represents a drop of 55 thousand barrels in relation to February.

Demand for diesel soars and other fuels plummet

The consumption of C gasoline, which uses 27% ethanol in its composition, fell from 620 thousand barrels per day in February to 570 thousand barrels per day in March.

“The near-term demand recovery will continue to be heavily influenced by the country's Covid infection rate, which has improved recently but remains very high. As a result, we moderated our demand forecasts for the rest of the year,” said Lenny Rodriguez, head of oil products and analysis for Latin America at S&P Global Platts.

For Rodriguez, the second quarter of 2021 will still be smaller than that of 2019, the pre-pandemic year. The projection points out that the total demand for gasoline and ethanol is 845 thousand barrels per day, 75 thousand barrels per day less than in the second quarter of 2019.

The demand for diesel showed a behavior opposite to that of gasoline and ethanol, reaching 1,13 million barrels per day in March alone, which represents a significant increase of 125 thousand barrels per day in relation to the previous month.

The report informs that the main contributors to the high demand for diesel were the agriculture and livestock sectors, with the sugarcane harvest well under way, in addition to transport, with the distribution of food, consumer goods and medicines, which are mainly carried out by trucks.

Ethanol reaches almost 5 reais at the pumps and filling up with gasoline becomes more advantageous in some Brazilian regions

The price of ethanol continues to skyrocket at fuel stations with the shortage of sugar and the increase in anhydrous alcohol, and those who “pay the bill” are Brazilians.

After a year of the pandemic, the consumer is faced with a very different reality regarding the price of ethanol at gas stations. Biofuel cost approximately R$1,99 per liter in March of last year, but today the reality is quite different and a liter of ethanol reached an absurd amount of almost R$5,00 at some gas stations.

According to information from the Sugarcane Industry Association (One size fits all), the price of ethanol may continue to rise and should normalize from the first half of June.

With the price of ethanol skyrocketing at fuel station pumps, filling up with gasoline in the capital and in the state of São Paulo already pays more for drivers.

Gasoline prices could skyrocket and ethanol could run out of stock due to the shortage of anhydrous alcohol; shortages will impact, even more, the pockets of Brazilians

Exemption from PIS and Cofins taxes for fuel came to an end last week and businessmen in the field were not at all satisfied. At the time, the measure was created to contain the rise in the price of gasoline and diesel applied by the oil company Petrobras. Now, there is a new concern for businessmen: the scarcity of anhydrous alcohol. The lack of this input can raise the price of fuel and cause a shortage of ethanol at gas stations, and, in the end, it will end up in the pockets of Brazilians.

According to André Marra, owner of gas stations in SP, the increase in compounds will impact the consumer's pocket, since the stations cannot absorb the increases alone and, therefore, need to pass on the price.