Sugar-Cane Fuel Wins in Brazil as Cheap Ethanol Beats Gasoline
- Consumers have been choosing cheaper ethanol over gasoline
- Prices surge to a record high as inventories decline
Sugar cane is harvested in Valparaiso, Brazil. Traditionally, drivers choose ethanol to fuel their cars when it’s below 70 percent of the price of gasoline, as the biofuel extracted from sugar cane yields about 30 percent less energy per liter.
Photographer: Paulo Fridman/BloombergBrazil’s economic and political crises are proving to be a boon to one of the nation’s most embattled sectors: ethanol producers.
Drivers, who used to switch between ethanol and gas depending on the price gap, are now just going for the cheaper, less-efficient ethanol as they try to cut short-term spending amid a battle with inflation as high as 10.7 percent, rising unemployment and an economy contracting at the fastest pace in a century. That’s helping keep ethanol prices at a record high for more than three months.