BRASILIA, (Reuters) – The Brazilian government plans to conduct tests over the next two months on the use of a higher percentage of ethanol in commercial gasoline, a government source told Reuters yesterday.
The test period will be used to determine the viability of increasing the mandatory blend of the biofuel in gasoline at the pump, the source said, adding that the trial will begin “as soon as possible.”
Brazil is currently blending ethanol into gasoline at the maximum of 25 percent. The source did not stipulate what higher blends were being tested but the cane industry is seeking a 27.5-percent maximum and lawmakers in Congress recently pushed unsuccessfully for a 30-percent blend ceiling.
Raising the blend requirement would favor the Brazilian cane industry, the world’s largest, as well as state-run oil company Petroleo Brasileiro SA, but the measure has faced government resistance in the past due to fears that a greater demand for sugarcane could spur inflation.