Brazil to reduce ethanol blend in gasoline to 20%

30 August 2011 23:07  [Source: ICIS news]

PORTO ALEGRE, Brazil (ICIS)--Brazil will reduce the amount of anhydrous ethanol in gasoline to 20% from 25%, a spokesperson for Brazil's Energy Ministry said on Tuesday.

The decision was made public on Monday by Brazil's Minister of Energy, Edison Lobao, after a meeting with Brazilian President Dilma Rousseff. 

The measure will take effect on 1 October.

The decision to reduce the ethanol blend in motor fuel was the result of a lacklustre sugarcane harvest.

Lobao said the government was already contemplating the possibility of the sugarcane crop not improving during the 2012-1013 harvest period.

The reduced ethanol blend would be applied indefinitely, Lobao said.

"We may revise the decision, changing it in a moment we think we're safe", he said.

Brazil, the world's largest sugar and sugarcane-based ethanol producer, currently faces a shortage of biofuels for domestic supply.

Brazilian Sugarcane group Uniao da Industria de Cana-de-Açucar (UNICA) said the reduction of anhydrous ethanol in gasoline does not change the amount of ethanol to be produced from the current sugarcane harvest.

The government action could also reduce ethanol imports, UNICA said. Brazil began importing ethanol this year to avoid a potential domestic shortage.

By: Leo Siqueira
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