Ethanol prices continue to skyrocket at fuel stations with a shortage of sugar and an increase in anhydrous alcohol and Brazilians are “paying the bill”

After a year of the pandemic, the consumer is faced with a very different reality regarding the price of ethanol at gas stations. In March of last year, biofuel cost approximately R$ 1,99 per liter, but, currently, the reality is quite different and a liter of ethanol reached the absurd amount of almost R$ 5,00 at some service stations. fuels. According to information from the Sugarcane Industry Union (Única), the price of ethanol may continue to rise and should normalize from the first half of June.

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We can say that a major influence on the rise in ethanol prices is related to the increase in gasoline prices, after readjustments by Petrobras, which has already increased the fuel by more than 53% this year alone and, combined with the off-season of sugarcane, has made the price of biofuel skyrocket.

Why does the increase in gasoline prices influence the price of ethanol? When the price of gasoline rises, more drivers choose ethanol, demand increases, and the price rises.

“Ethanol is an agricultural product and, as always, there are harvests and off seasons. It is normal to have a price increase during this time of year. What is not normal is the increase in gasoline prices, which ends up pushing the price of ethanol up due to the increase in demand”, says Guilherme Moreira, coordinator of the IPC (Consumer Price Index) of Fipe (Fundação Instituto de Pesquisas Econômicas).

With the soaring price of ethanol, fueling up with gasoline becomes more advantageous

The indicator of the Center for Advanced Studies in Applied Economics (Cepea), of the Department of Economics, Administration and Sociology of the Superior School of Agriculture "Luiz de Queiroz" (Esalq/USP), shows that ethanol had a variation of 14,48% in prices that month. At the distributor, the liter costs R$ 3,12, according to a May 10 survey.

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.

Although the consumer recognizes that gasoline is a polluting fuel compared to ethanol, the switch becomes inevitable from an economic point of view. "There's no way. For those who travel more than 200 kilometers a day, they have to change fuel”, says Adriano Ribeiro, who works as an app driver.

The account to be made by the driver when filling up is even simpler. Just divide the price of ethanol by that of gasoline. If the result is up to 70%, it pays to fill the tank with alcohol more. Otherwise, gasoline compensates more.

According to the IPC (Consumer Price Index), by Fipe, which measures inflation for families in the city of São Paulo, ethanol was the fifth product with the highest price increase between January and February, with 4,28%.

What gas station owners and ethanol producers say

The president of Sincopetro (Retail Trade Union of Petroleum Derivatives) of the State of São Paulo, José Alberto Paiva Gouveia, highlighted the position of the posts on the subject.

“The post transfers what comes from the increase and works with gross margin. I work, for example, with a margin of R$ 0,45 per liter sold. So, if a liter costs R$6,00, R$5,00 or R$4,00, I earn R$0,45 for every liter I sell. Including, for the gas station, it is much better when the price per liter is low because the consumer will spend more liters and I will earn more in liters. The price is set by the mill owner”, he says.

According to Unique (Union of the Sugarcane Industry), ethanol prices reflect the reality of the market in the search for a balance between supply and demand. The restart of the harvest could be a factor in the drop in the price of ethanol and that from the first half of June there will be a drop in fuel prices, but the scenario is still very uncertain.

“Since it floats freely, the value is affected, among other factors, by the sugarcane off-season, by the operational recomposition of distributors’ inventories, by the price of gasoline and by dollar and oil quotations on the international market” , says Unique.