Direct Sale of Ethanol from Mills Will Stimulate Competition and Curb Gasoline Price Increase at Fuel Stations

Written by Flavia Marinho

Published on 08/04/2021 at 11:00

Updated on 09/04/2021 at 21:06

Usina de etanol / Fonte: Reprodução – Via Google

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Ethanol Sales by Sugar Mills Directly to Gas Stations May Become the Solution to Contain and Curb the Rise in Gasoline Prices

In an attempt to curb the rise in gasoline and diesel prices at gas stations, the Legislative Decree Project (PDC 916/2018), which deals with the direct sale of ethanol by sugar mills – without passing through distributors, has gained momentum in recent weeks with government support. Ethanol and gasoline prices skyrocket, Petrobras raises CNG by 39%, and the adjustment may further impact the wallets of Brazilians in the coming weeks

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On the last Tuesday (04/06), the director-general of ANP, Rodolfo Saboia, stated that the creation of the so-called linked distributor – a regulatory alternative to enable the direct sale of ethanol by sugar mills to gas stations, has been delayed due to the Ministry of Economy’s slow response in presenting a tax solution.

He participated in a remote public hearing of the Economic Affairs Committee (CAE), chaired by Senator Otto Alencar (PSD), to discuss the fuel distribution system in Brazil and the existence of a possible cartel in the segment.

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“We hope that this project continues as soon as possible. The CCJ does not analyze the merit but rather the constitutional principles, to verify if it is not harming the nation financially. I believe it will be voted on this month,” says José Ricardo Sévero, technical director of the Federation of Sugarcane Planters of Brazil (Feplana).

“Technically, the ANP supports the direct sale of ethanol. However, it faces some requirements that it must adhere to. Today, it is not possible to implement the direct sale,” Saboia declared. According to the agency’s director-general, a resolution from the National Energy Policy Council (CNPE) establishes that the commercialization of “fuel alcohol” without an intermediary between the producer and the reseller will be regulated by the ANP considering competitive equality in the tax aspect and preserving tax revenue from specific rates.

Direct Ethanol Sales from Mills Will Stimulate Competition with Gasoline

It is still not possible to know exactly how much the direct sale of ethanol would impact the price of the biofuel in Brazil, as there is a lot of dependence on industrial logistics in each state. However, a study by Esalq-Log in 2019 showed that the average transportation cost of ethanol in the state of São Paulo would fall by about 30% with direct sales.

There are also estimates that the concentration of production and distribution margins in the producer and the increased competition among sugar mills and distributors in the fuel supply market could reduce hydrated ethanol prices for the end consumer by up to 20 cents per liter.

“The great gain is the appreciation of renewable fuel. It will be more competitive against fossil fuel, gasoline, and it will be more attractive for consumers to refuel,” points out Sévero.

Raízen of the Shell Group Wants to Build Three Ethanol Production Plants Using Bagasse and Sugarcane Straw

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

The technology for producing cellulosic ethanol arose from a partnership between Shell and the Canadian company Logen, specialized in biotechnology. In the previous harvest (2019/20), the Piracicaba unit produced 226 liters of ethanol for each ton of dry biomass.

Direct Sale of Ethanol from Mills Will Stimulate Competition and Curb Gasoline Price Increase at Fuel Stations

Ethanol Sales by Sugar Mills Directly to Gas Stations May Become the Solution to Contain and Curb the Rise in Gasoline Prices

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Direct Ethanol Sales from Mills Will Stimulate Competition with Gasoline

Raízen of the Shell Group Wants to Build Three Ethanol Production Plants Using Bagasse and Sugarcane Straw

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Direct Sale of Ethanol from Mills Will Stimulate Competition and Curb Gasoline Price Increase at Fuel Stations

Ethanol Sales by Sugar Mills Directly to Gas Stations May Become the Solution to Contain and Curb the Rise in Gasoline Prices

Read Also

Direct Ethanol Sales from Mills Will Stimulate Competition with Gasoline

Raízen of the Shell Group Wants to Build Three Ethanol Production Plants Using Bagasse and Sugarcane Straw

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Tire road? Thousands of shredded tires were secretly placed under a ramp in California, preventing a one-year delay in a project on weak soil and supporting a 26-foot-high structure in a corridor connected to I-880.

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