Brazil to maintain volume of ethanol mixed with gasoline at 20%

Ricardo de Gusmao Dornelles, director of the renewable fuels department at the Mines and Energy Ministry said Brazil will not raise the volume of ethanol mixed with gasoline sold at service stations and will maintain the current 20% even after the sugarcane harvest begins in April. The government lowered the percentage of ethanol mixed with gasoline from 25% to 20% last October because the price of biofuel skyrocketed due to a lack of supply brought about by two consecutive years of poor sugarcane harvests. Thus, Biofuel became more expensive between harvests and less competitive as a substitute for fossil fuel. After the government lowered the percentage of ethanol mix, it promulgated new government rules aimed at increasing stocks of biofuel. These have resulted in an oversupply in the market which in turn has undermined the price of ethanol. (January 26, 2012)