Price drops make ethanol pay off more in most of Brazil; see your state

Gasoline, ethanol and S-10 diesel became cheaper in August, the third consecutive month of decline. According to a survey by ValeCard, ethanol drove the movement with a decrease of 2.06% in the national average, against 0.68% for gasoline and 0.51% for S-10 diesel.

On average in the country, gasoline went from R$6.821 to R$6.774 per liter. Ethanol fell from R$4.365 to R$4.275, and S-10 diesel, from R$7.196 to R$7.159. Since May, ethanol has accumulated a drop of 7.45%, much higher than 1.97% for diesel and 1.21% for gasoline.

There is a short deadline embedded in this relief: on August 26, the government extended the gasoline subsidy only until September 9. The measure safeguards transfers and, without renewal, part of the pressure currently contained may reach the pump.

Which fuel pays off the most in each state

Ethanol pays off in 17 states

The stronger drop in biofuel has widened its advantage. In August, ethanol cost, on average, 63% of the price of gasoline, against about 64% in July. By the parameter of up to 70% used as an initial reference for flex-fuel cars, ethanol started to compensate in 17 states, against 13 in July and ten in June.

The best ratios were in Roraima (54%), Mato Grosso (56%), Amapá and São Paulo (59% each). The lowest average price of ethanol was in São Paulo, at R$3.865 per liter; the highest, in Sergipe, with R$5.537. The biofuel retreated in 25 states, with an increase only in the Federal District (4.70%) and Sergipe (0.13%).

North in the opposite direction

Gasoline fell in 19 states, especially Bahia, where the average price fell 1.83%. The Federal District had the highest increase, of 4.04%. Rio Grande do Sul recorded the cheapest liter in the country, R$ 6.337, and Roraima the most expensive, R$ 8.168 – a difference of R$ 1.831 that exposes the weight of regional logistics.

In S-10 diesel, the drop also reached 19 states, driven by Pernambuco, Paraíba, Tocantins, Minas Gerais and Santa Catarina. The North, however, moved in the opposite direction: Acre, Amazonas, Amapá and Roraima rose without interruption in June, July and August. Acre has accumulated an increase of 11.59% since May and now has the most expensive diesel in the country, at R$ 8.233 per liter, while Rio Grande do Sul maintains the cheapest, at R$ 6.368.

For Marcelo Braga, director of Mobility and Operations at ValeCard, the market has entered “a period of greater accommodation, but that does not mean the absence of risks.” He points to oil, exchange rate and logistics costs as the most sensitive variables, especially for diesel, and credits part of the drop to the fuel subsidy.

The picture is drawn in an environment of weaker inflation: the IPCA-15 of August registered a deflation of 0.40%, with 4.24% accumulated in 12 months, according to the IBGE.

The ValeCard survey does not use official price data: it is based on transactions made with the company’s cards between August 1 and 26, in more than 25 thousand accredited stations in the country.