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The State of São Paulo, Which Accounts for About Half of Brazil’s Fuel Consumption, the Price of Ethanol Rose 8.5% in Just One Week
With another increase in gasoline prices at gas stations since yesterday (03/02), people have opted for ethanol. Only last week, the biofuel rose in all Brazilian states – without exception, according to data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP) collected between February 21 and 27.
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Increase in Gasoline Prices Reflects and Raises Ethanol Prices in Brazilian States
During the period, for example, ethanol rose as much as 12% at gas stations in Minas Gerais in just one week. With a price of R$ 3.736 per liter at gas stations in Minas Gerais, the biofuel remained technically within the correlation of 70% with the price of gasoline. Below this level, the renewable fuel is more advantageous for the average of the Brazilian flex fleet engines and generally stimulates demand.
According to the ethanol price in Minas Gerais, director of SCA Trading, migration can occur not only when the biofuel is competitive, but also when the nominal difference between the price of gasoline and ethanol increases significantly, as was the case last week.
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In the State of São Paulo, which accounts for about half of the country’s fuel consumption, the price of ethanol rose 8.5% in just one week, ending February with an average of R$ 3.496 per liter. Compared to gasoline, the price was slightly above parity, at 71.9%.
Technical Competitiveness Between Gasoline and Ethanol
Despite the loss of technical competitiveness in other markets throughout the week, preliminary data circulating in the market indicates that, in February, up to the week of Carnival, drivers reduced gasoline consumption and switched to ethanol.
Ethanol only maintained its technical competitiveness against gasoline in Goiás and Mato Grosso, where, even with increases of 4.63% and 1.1%, respectively, the biofuel remained below 70% of the gasoline price for the week.
According to data from the ANP, the price of gasoline was more than R$ 1 higher than that of ethanol in 21 states and in the Federal District, which rarely occurs in the market.
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