The price of ethanol has risen in recent days in Ribeirão Preto (SP) and now reaches R$4.39 per liter at some stations in the city. Fuel, which until last week was available for R$3.90, became up to 12.6% more expensive in establishments surveyed by EPTV, a TV Globo affiliate.
In the North zone, a liter of ethanol is sold between R$4.17 and R$4.29. In the South zone, the price reaches R$4.39.
Figures from the Center for Advanced Studies in Applied Economics (Cepea), at the University of São Paulo (USP), show that the increase also occurred in the prices charged by the plants.
In the first week of October, a liter of hydrated ethanol was traded at R$2.56. On November 6, the value reached R$2.87, an increase of approximately 12% in the period.
According to experts, the adjustment is the result of a combination of factors, such as increased demand for ethanol, reduced supply at plants and the appreciation of sugar on the international market.
Fuel pump — Photo: Reproduction/EPTV
Why did ethanol become more expensive?
One of the explanations for the increase is the change in the proportion of anhydrous ethanol mixed with gasoline, which went from 27% to 32%.
According to economist Maurílio Benite, the measure increased demand for biofuel, but production was unable to keep up with this growth in the short term.
"There are no conditions to plant more sugarcane to increase production and maintain prices before this mixture increases. So, this is a transfer that was already expected by experts in the sector", he explains.
Another factor that influences prices is the international sugar market. As the product is traded in dollars, the appreciation of exports may lead mills to allocate a greater portion of sugar cane to the manufacture of sugar, instead of ethanol.
"Exporting sugar is being very advantageous for the mills. So, they are, in part, changing the production of part of the alcohol to sugar, consequently, reducing the supply of alcohol a little", says Benite.
Sugarcane harvest in the Ribeirão Preto region — Photo: Reproduction/EPTV
Reduction in production at plants
The president of the Núcleo Postos Association, which brings together 120 resellers in the Ribeirão Preto region, Fernando Roca, explains that the proximity of the sugarcane off-season also contributes to the rise.
At this time of year, plants begin to reduce activities to carry out equipment maintenance. With lower production, the sector needs to manage stocks to guarantee supply until the next harvest.
"During this period, the plant begins to maintain its equipment and ethanol production drops drastically. So it is a period in which the product traditionally has a significant price increase, precisely for this reason, so that the plant can control its stock and not run out of supplies for the consumer", says Roca.
According to him, the stations are already feeling the effects of this reduction in supply.
"We have already identified ethanol price adjustments coming to distributors at least 15 days ago."
Ethanol reaches R$ 4.39 at a gas station in the south of Ribeirão Preto, SP — Photo: Reproduction/EPTV
Could fuel get even more expensive?
The outlook for the coming months also worries experts.
According to Benite, the tax benefit that exempted fuel taxes was extended until December 9th. If there is no new extension, prices may undergo further adjustments.
"If the government does not extend this tax exemption again, obviously the tax on fuel will become more expensive. And not only alcohol, but also gasoline will become more expensive", he states.
For drivers thinking about replacing ethanol with gasoline, the scenario also requires attention.
According to Fernando Roca, distributors have already started to pass on increases in the price of gasoline to stations.
"We have already started receiving gasoline with a proportional adjustment. We are not identifying, at the moment, price stability", he says.
Therefore, the recommendation for consumers is to research prices before refueling and compare the cost-benefit of the two fuels.
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