Ethanol And Gasoline Prices Soar, Petrobras Increases CNG By 39%, And Adjustment May Further Impact Brazilians’ Wallets In The Coming Weeks

With Ethanol and Gasoline Prices Soaring, Refueling with CNG Remains Advantageous Even with Petrobras’ 39% Increase, Says Copergás

Last Monday (5), Petrobras announced a 39% hike in the selling prices of Compressed Natural Gas (CNG) for distributors. Starting in May, CNG, the main option for drivers who travel many kilometers each day and want to avoid rising gasoline and ethanol prices, will also impact the wallets of Brazilians. However, even with the increase, refueling with Natural Gas will continue to be advantageous, says Copergás.

Read Also

• Petrobras Invests in Northern Brazil and Acquires Stake in 6 Blocks for Oil Exploration from BP
• After Ford Exited the Country and Automakers Halted Production in 29 Factories, Volkswagen and Toyota Resume Production in Brazil
• Brazil, the World Leader in Ethanol Production, Could Benefit from India’s Increased Ethanol Blend in Gasoline to 20%
• Ethanol Prices Plummet at Mills
• Ethanol Prices Evaporate at Mills and Distributors Burn Off Stocks

Differently from the prices of gasoline, diesel, and LPG (used in gas cylinders and kitchens), CNG prices are adjusted quarterly. The increase in reais per cubic meter will take effect on May 1, and the price will remain until the end of July.

According to the Brazilian oil company, the cleaner fuel found accumulated in porous rocks underground is also tied to oil prices. “For the months of May, June, and July, the reference is the prices from January, February, and March. During this period, oil prices rose by 38%, following the upward trend of global commodities. Additionally, domestic commodity prices increased due to the depreciation of the real,” the company states in a note.

Another factor that contributed to the 39% increase was the variation of the IGP-M, used for the annual adjustment of the CNG transport contract, which occurs every May. The accumulated increase this year was 31% for the index, also known for impacting rental values.

In the announcement regarding the increase, Petrobras also justified that natural gas had a cumulative reduction of 35% in reais last year.

Increase in Ethanol, Gasoline, and Now CNG Prices Will Impact App and Taxi Drivers Even More

CNG has become popular in Brazil among app drivers and taxi drivers. This is because it provides better mileage and is cheaper than ethanol and gasoline. According to distributor BR, the savings average 60%.

A popular car that travels 100 km per day achieves 8 km per liter of ethanol, 10 km per liter of gasoline, and 12 km per cubic meter of CNG. However, the costs for installing the cylinders in the trunks are high, ranging from R$ 3,000 to R$ 6,000, plus the disadvantage of taking up space in the trunk.

The option for this fuel gained momentum at the beginning of this year with the spike in gasoline and ethanol prices, which have risen by 40.76% and 25%, respectively. While the cost per cubic meter of CNG is R$ 2.984, gasoline costs R$ 5.328 per liter and ethanol R$ 3.818, based on prices for São Paulo measured by the ANP (National Agency of Petroleum, Natural Gas and Biofuels).

Raízen of the Shell Group Aims to Build Three Ethanol Plants Made from Bagasse and Sugarcane Straw

Raízen, a global giant in ethanol production in partnership with Shell, intends to build three more cellulosic ethanol plants — or second-generation ethanol plants. The good news was announced by businessman Rubens Ometto of Cosan last Monday (03/15).

The technology for producing cellulosic ethanol was developed through a partnership between Shell and the Canadian company Logen, which specializes in biotechnology. In the last harvest (2019/20), the Piracicaba unit produced 226 liters of ethanol for each ton of dry biomass.