Ministry of Mines and Energy (MME) Temporarily Reduces Biodiesel Blend From 13% to 10% in Diesel Due to High Fuel Prices

MME Temporarily Reduces Biodiesel Mixture in Diesel From 13% to 10% After Auction 79 Due to Fuel Price Increase

This Friday (9), the Ministry of Mines and Energy (MME) announced that the biodiesel mixture in diesel will be temporarily reduced from 13% to 10% after Auction 79 for fuel purchase.

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According to the Federation of Retailers of Fuels and Lubricants (Fecombustíveis), the biofuel would contribute R$ 0.67 per liter to the diesel pump price if the price conditions of the last biodiesel auction initiated by the ANP were maintained.

This is due to the sale offers in the auction that reached R$ 7.50 per liter, nearly R$ 3.00 more than the average prices of the last auction in February.

Statement from the Ministry of Agriculture on the Reduction of Biodiesel Mixture

Despite the expectation that the Brazilian soybean harvest, one of the main raw materials for biodiesel, will grow to approximately 136 million this year, global demand remains strong, leading to a momentary reevaluation of the mixture percentage in fuels, according to a joint statement from the ministry and the Ministry of Agriculture.

The other ministries added that the government supports the biodiesel program and anticipates the resumption of mixture utilization at the levels established by the National Energy Policy Council. The 13% mixture in fuels came into effect in March, an increase of one percentage point over the previous level.

MME Had Previously Reduced the Mixture in Fuels

This is not the first time the government has temporarily reduced the mixture in diesel; however, the difference is that our country, despite being one of the largest producers and exporters of soy, is in the harvest phase with large stocks. In August, the country was in the off-season when the ANP canceled a bidding event.

At that time, the Minister of Mines and Energy (MME), Bento Albuquerque, announced the reduction of the mixture in diesel, citing issues with soybean availability. Brazilian biodiesel uses soybean oil as its largest raw material component, comprising approximately 71%, with the remainder made up of bovine tallow and other oils.

On the last Friday, Petrobras announced a 2.2% cut in diesel prices at its refineries, or R$ 0.08 per liter. This cut aligns with fluctuations in international prices and the drop of the dollar. In addition to the biofuel, another factor pressuring the fuel is the end of the federal tax exemption period in May.