Ethanol has the lowest price in two years and is already competitive in seven states and DF

The price of ethanol has plummeted in recent weeks, reaching below R$ 3 per liter in some cities, and it is already competitive with gasoline in seven states and the Federal District, according to the ANP (National Oil, Gas and Biofuels).

The scenario favors the consumer but is a matter of concern among sugarcane producers in the Northeast region, who see pressure on raw material sales prices, with losses for rural producers.

According to data collected by the ANP between September 25th and October 1st, it is worth opting for ethanol in Bahia, Distrito Federal, Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraíba and São Paulo.

The competitiveness assessment considers that the price of ethanol has to be equivalent, at most, to around 70% of the price of gasoline to compensate for the lower yield.

The state with the greatest competitiveness for ethanol is Mato Grosso, where the average price of the product is equivalent to 58.6% of the price of gasoline. It is the only state with an average price below R$ 3: R$ 2.81 per liter. Gasoline at stations in the state comes out, on average, at R$ 4.79 per liter.

In the other five states where fuel is advantageous, the percentages vary between 67.55%, in Goiás, and 71.37%, in the Federal District. The ANP survey did not bring up the price of ethanol in Amapá, the state that has the cheapest gasoline in the country.

In its price survey for the week ended September 30, the ANP found the cheapest ethanol in the country in Cuiabá, at R$2.67 per liter. In two other cities, São Paulo and Goiânia, the product was found at less than R$ 3 per litre.

The national average price was R$3.37 per liter, a drop of 31% since Congress passed cuts in federal and state taxes on fuel. In the period, the price of gasoline fell 35%, to R$ 4.81 per liter, on average.

The average selling price of ethanol last week was the lowest since August 2020, in inflation-adjusted values. At the time, the market was still suffering the effects of the drop in demand caused by social isolation measures at the beginning of the pandemic.

Disregarding the period of the pandemic, it is the lowest value since August 2018.

The drop in fuel prices has been used as one of the trump cards in the campaign for the reelection of President Jair Bolsonaro (PL), who during the first round visited gas stations in Brazil and England.

Bolsonaro even promised that Brazil will have one of the cheapest gasoline in the world. In fact, the country advanced in a ranking prepared by the Global Petrol Prices website, but last week it still occupied the 33rd position.

With the rise in oil in the last week, the government has been pressuring Petrobras to at least hold the price of gasoline until the second round. To reduce resistance, he is considering replacing the company’s CFO, Rodrigo Araújo, with a more aligned executive.

This Thursday (5), the average price of gasoline in Brazilian refineries was R$ 0.31 per liter below the import parity —a benchmark in relation to international prices—. It is the biggest lag since the beginning of July.