By VANESSA DEZEM
Senators in Brazil approved a bill increasing the mandatory
amount of ethanol added to gasoline sold at service stations
in the country as demand for the alternative fuel declines.
The minimum ethanol content in the countrys gasoline
blend will be raised to 27.5% from 25%, the Senate said on
its website on Sep. 2. The bill still needs to be ratified by
President Dilma Rousseff.
Ethanol producers have criticized government policies
limiting gasoline price increases as drivers increasingly
favor the fossil fuel over ethanol
. Most cars in Brazil have
so-called flex-fuel engines that can run just on ethanol
or a mix of the
alternative fuel and gasoline, giving drivers the ability to
choose. Service stations typically have ethanol pumps
standing next to the ones with the gasoline-ethanol blend.
Marginal increases to the blend rate do not solve the
fundamental pricing issue that results from having to sell
ethanol cheaper due to subsidized gasoline, Alejandro
Zamorano Cadavid, an analyst at Bloomberg New Energy Finance
in New York, said by e-mail. From producers point
of view, you are being given the opportunity to sell more
ethanol at a price that has been too low for years.
The government last boosted the proportion of ethanol
in the gasoline mix in
April of last year, to 25% from 20%.
The bill senators approved on Sep. 2 also increases a cap on
the optional amount of biodiesel that can be mixed into
fossil diesel to 6% from 5%.