Brazil’s dual-fuel ethanol fleet stabilises gasoline prices despite Iran war oil shock
As the war in Iran rattles global oil markets, Brazil is partially shielded by a decades-old buffer against shocks that is both cheap and environmentally friendly.
Tens of millions of drivers here can choose between filling their tank with 100% sugarcane-based ethanol or a gasoline blend that contains 30% of biofuel.
Brazil’s massive dual-fuel fleet — consisting of vehicles capable of running on any combination of ethanol and gasoline — is unique in its scale. The program, launched in 1975 during the country’s military dictatorship, has successfully evolved in democratic times to reduce dependency on foreign oil.
Today, as the latest conflict involving Iran, the United States and Israel enters its fifth week, nations like India and Mexico are looking at the Brazilian model as a blueprint for energy security.
While consumers worldwide face steep price hikes, Brazilian gasoline prices rose just 5% in March — compared to 30% in the United States. Analysts partially credit the stability to a mature domestic biofuels industry that allows the country to withstand geopolitical shocks with minimal risk of fuel shortages.
-AP
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