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Petrobras reportedly to miss ethanol relief in 2014

  • Brazil reportedly is delaying until at least 2015 any move to increase in the ethanol portion used to blend with gasoline, which would postpone potential relief from subsidized fuel imports for Petrobras (NYSE:PBR).
  • The government is waiting to decide whether to boost the amount of ethanol in the gasoline mix to 27.5% from 25%, since Brazil does not have enough supply this year and must wait until the next sugar cane harvest to boost the blend, a government source tells Bloomberg.
  • PBR has posted more than $40B in refining and distribution operational losses since 2011 when it began subsidizing imported fuel to meet government mandates; having more ethanol in the gasoline blend would reduce its need for imported fuels at a time of growing domestic consumption.
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