Gas station in Sao Paulo

With Brazil's ethanol prices soaring to new highs, the nation's government has put forth a policy to reduce the mandatory ethanol blend in gasoline to as low as 18 percent. Until now, all gasoline sold in Brazil had to be at least 25 percent ethanol. With ethanol now in short supply, the government has decided to take action.

The ethanol limit, which was outlined in an executive measure published in late April, goes into effect immediately. Although the measure is not directly related to sugar, a change in Brazil's ethanol policy could potentially impact production of the sweetener because the nation relies upon sugarcane for its ethanol.

Surging ethanol prices over the past couple of months, due mainly to a limited sugarcane harvest, led authorities to take immediate action. Brazil's energy minister, Edison Lobao, says that, although ethanol prices have started to drop, the government will still move forward with plans to reduce its mandatory ethanol blend in gas.

[Source: Ward's Auto – sub. req. | Image: Mariordo – C.C. License 2.0]