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HomeHoroscopeBrazil considers using more biodiesel to avoid fuel shortages

Brazil considers using more biodiesel to avoid fuel shortages

The government Brazilian is evaluating an increase this year in the amount of biodiesel mixed with truck fuel to avoid shortages.

Larger economy Latin America may increase the biodiesel blend from 10% to 15% if diesel inventories remain at low levels during the second half, according to people with direct knowledge of the matter, who asked not to be identified because the discussion is not public. The increase would be in effect for a limited time, one of the people said.

Using more biodiesel would actually raise fuel prices, as biodiesel is more expensive than petroleum-based fuel. Diesel prices are already at record levels due to tighter global supply amid sanctions on Russia following the invasion of Ukraine. The higher mix would help maintain inventories at a time when there is a greater risk that US supplies will be reduced due to hurricanes in the Gulf of Mexico.

Brazilian President Jair Bolsonaro is working on proposals to ensure fuel supplies with minimal impact on prices as the country struggles amid high inflation and awaits re-election in October. Blending more biodiesel would require more soybeans to be crushed in Brazil rather than exported, squeezing supply and threatening to worsen runaway food inflation.

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