Brazilian govt to decrease ethanol in gas

Brazilian Mines and Energy Minister Edison Lobao has announced that the government will decrease the admixture of alcohol with gasoline provided to service stations from 25 to 20 as of 1 October 2011. Brazil uses sugarcane to produce ethanol as an additive to gasoline. Lofty sugar costs are making U.S. corn-based ethanol more competitive, allowing U.S. ethanol producers to enter markets that previously exclusively imported Brazilian ethanol. The government’s decision comes as a result of a disappointing cane crop and the incentive of higher global prices to turn more of the harvested sugarcane into sugar rather than fuel. Lobo has stated that because next year’s harvest will not be much better than the current one, it is in Brazil’s best interest to act early.

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