In Brazil, biodiesel is cheaper than imported diesel amid debate about higher blend

A survey revealed on Monday that the 'cost of imported diesel has exceeded the price of biodiesel in Brazil. This is a 'rare situation, which provides more 'arguments to farm lobbyists who support a proposal for a mandatory increase in the mix of biofuels in fossil fuel. The U.S. and Israeli attacks on Iran are causing a spike in diesel prices, which is the biggest threat to Brazil's agricultural sector. This will increase costs for farmers harvesting a record -sized soybean crop.

According to a report from the consultancy firm Raion Consultoria, biodiesel was quoted in Brazil at 5.4881 reais per liter, while imported diesel cost 5.6740 reais. According to Eduardo Oliveira de Melo of Raion Consultoria's managing partner, "from a.technical perspective, there is a lot more room to increase the mix. But to do that, you need to convince the government."

CNA, the agriculture lobby group, has asked the government to increase the biodiesel blend in diesel from 15% to 17% "urgently", to reduce the impact of rising oil prices on the diesel market. According to an official schedule, the mix will rise to 16% by the end of this year.

Sergio Araujo is the head of the fuel import lobby Abicom. He said that now was not the time to add more fuels. He said that the move would result in higher diesel prices for final customers, after accounting for costs like logistics expenses. Abicom, along with fuel distributors' and gas station lobbyists' groups, supports a different proposal. They want the government to allow biodiesel imports that are currently banned, up to 20% of Brazil’s demand.

(source: Reuters)