Brazil fuel retailers urge government to cut ethanol blending
They argue that a smaller production in the current season has reduced the biofuel’s supply and increased prices.
Fecombustiveis, an association representing around 40,000 petrol stations in Brazil, asked for the ethanol blend to be reduced from 27% currently to 18%, saying the smaller sugar cane crop this year due to drier-than-normal weather reduced ethanol production.
Nearly 90% of ethanol produced in Brazil is made from sugar cane, with around 10% being corn-based. The country’s centre-south cane crop is off to a slow start this year.
Fecombustiveis said it received reports from associated companies saying fuel distributors were having trouble acquiring enough ethanol from mills for the mandatory blending requirements, causing delays in distribution, Reuters reported.
Brazil last month cut the amount of biodiesel it blends into diesel from 13% to 10% due to tight supplies and high prices.
Analysts expect a tight supply of ethanol this year, with mills giving priority to sugar production.
Ethanol prices are hovering around all-time highs, according to Cepea.
Brazil’s Enegy Ministry said it is following the supply situation and has not seen the need to cut ethanol blending.
A spokesman said: “With the (cane) harvest just starting, it is doubtful a change would be made now.”