<article><p class="lead">President Jair Bolsonaro blamed Brazil's anhydrous ethanol blend for high gasoline prices, hinting that he could push to reduce the blend, in yet another potential blow to the biofuels industry.</p><p>In his weekly broadcast on social media, Bolsonaro said that "the price of gasoline could fall a little if the level of ethanol in gasoline is lowered."</p><p>Under current legislation, the government's inter-ministerial committee for sugar and ethanol (Cima) has the authority to establish the anhydrous blend at 18-27pc.</p><p>Bolsonaro said that gasoline costs "an average of R2 ($0.37/liter) at the refinery, adding that the "prices increase because ethanol is added."</p><p>The discussion regarding the possible reduction in the ethanol blend, currently at 27pc for E27 gasoline, comes after the biodiesel industry has faced a series of reductions in the mandatory blend in response to broader government concerns about rising fuel prices.</p><p>The Bolsonaro administration has lowered the biodiesel blend, used for trucks and farm machinery, on several occasions over the past year. Earlier this month, the national energy policy council (CNPE) reduced the blending mandate for an October biodiesel auction to supply the market in November and December to 10pc from 12pc. </p><p>Brazil's consumer price index (CPI) rose nearly 10pc in the 12-month period ending in August, the highest level for the month in over two decades, largely on the back of rising energy prices.</p><p>Mills in Brazil's center-south region have been maximizing anhydrous production and production of the biofuel jumped by over 42pc in the second half of August to 941mn l (394,580 b/d), compared to 661mn l in the same period of 2020. The price of anhydrous ethanol rose 84pc over the same period in the center-south producer region, to a monthly average of R3,952/m³ ex-mill with taxes in August 2021, according to Argus data.</p><p>Brazilian fuel retailer association Fecombustiveis, which represents over 40,000 filling stations, <a href="https://direct.argusmedia.com/newsandanalysis/article/2216669">urged the government to lower the anhydrous blend earlier this year</a>, arguing that the smaller sugarcane harvest would reduce supply of the biofuel.</p></article>
