January 28, 2022

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Government evaluates measure to try to avoid R$0.12 increase in diesel fuel - News

Government evaluates measure to try to avoid R$0.12 increase in diesel fuel – News

To avoid an average increase of 0.12 Brazilian real per liter, according to the federal government, the National Council on Energy Policy (CNPE) decided to recommend to the president Jair Bolsonaro (PL) Reduce the mandatory mix of Biodiesel in diesel in 2022. The plan was to have a 14% blend from March 1, but the minimum percentage is expected to remain at 10%. The authority is headed by the Minister of Mines and Energy. Pinto Albuquerque, and advises the Presidency of the Republic in setting general policies for the sector.

According to the Council, “It is necessary to promote the reduction in diesel prices, which is necessary to avoid a sharp deterioration in the competitiveness of national production chains, as well as significant impacts on consumer welfare. In light of this, it is proposed to set the percentage of biodiesel mixture in diesel at 10% for 2022 CNPE also says, in a technical note, that the decision seeks to “protect the public interest in relation to the supply and price of biodiesel.”

The proposal came from the Ministry of Economy. Technical note from Seae [Secretaria de Advocacia da Concorrência e Competitividade] A maintenance proposal for the current level of mandatory addition of 10% – which was approved at the last auction for the sale of the product (biodiesel auction 82) – given the start of a new model for marketing this fuel, which will be competition from the market, already in practice in the market for ethanol and other fuels Derived from petroleum,” the ministry said in a note.

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Biodiesel price

The government’s initial proposal was to increase the mix of biodiesel in diesel to 15% by 2023, to encourage the presence of biofuels in the Brazilian energy matrix. However, the executive branch reduced mixing biodiesel into diesel throughout 2021, in an effort to slow the rise in fuel prices.

Soybean oil, which makes up 71% of biodiesel composition, has become more expensive during the pandemic, due to increased global demand and a rising dollar, which has made the fuel more expensive.