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08/05/2011 - 07:00hs

Petrobras to expand presence in ethanol industry

The Brazilian state-run company intends to raise its share in the sector from 5% to 15%, de according to the minister of Mines and Energy, Edison Lobão.

Brasília – Petrobras is going to increase its share in the ethanol production chain. The company is now responsible for 5% of all the Brazilian output and aims to raise the rate to 15% by the end of the Dilma Rousseff administration. The information was disclosed on Friday (6th) by the minister of Mines and Energy, Edison Lobão, after meeting with the president at the Alvorada Palace (seat of the federal government). The government wants Petrobras to have an ever-increasing influence on the formation of the biofuel’s price.

“We have adopted a policy of a more aggressive presence of Petrobras in ethanol production. As a result, Petrobras will become an efficient regulator of ethanol supplies and pricing,” explained the minister.

Lobão also claimed that the government does not consider taking measures to control the price of gasoline, which will continue being set based on market rules. “We have not made changes in the price of fuels as they leave the refineries in the last nine years. And we will remain that way. There will be no change in fuel prices as long as the international price of the barrel [of oil] remains around the levels that we know,” said the minister.

The government, however, expects the new sugarcane crop will contribute to lower the price of gasoline starting next week. “As of next week, the supply will be much greater, and consequently ethanol prices will tend to decline further and further,” said the minister. The price of ethanol influences the price of gasoline, because in Brazil the oil derivative has up to 25% of ethanol in its composition.

*Translated by Gabriel Pomerancblum

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