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Price Supports for Fuel Ethanol, Sugarcane, and Freight Charges: Alterations Stemming from Deregulation

In: Production of Ethanol from Sugarcane in Brazil

Author

Listed:
  • Márcia Azanha Ferraz Dias de Moraes

    (University of São Paulo)

  • David Zilberman

    (University of California)

Abstract

Hydrous ethanol was not competitive with gasoline on strictly economic terms, because, at the time of the creation of the Programa Nacional do Álcool (Proálcool, National Ethanol Program), in 1979, the cost of its production was higher than that of gasoline. Until October 1999, there was a price support mechanism in place, designed to make the use of hydrous ethanol more feasible, that subsidized producer prices. The resources for that support came from the collection of an add-on to the price of petroleum-based fuels (including diesel, which was important, because diesel-powered vehicles move most of the freight in the country and almost all urban public transport is also diesel-powered). Since 1999 there is no more price support for ethanol in Brazil.

Suggested Citation

  • Márcia Azanha Ferraz Dias de Moraes & David Zilberman, 2014. "Price Supports for Fuel Ethanol, Sugarcane, and Freight Charges: Alterations Stemming from Deregulation," Natural Resource Management and Policy, in: Production of Ethanol from Sugarcane in Brazil, edition 127, chapter 6, pages 65-68, Springer.
    • Handle: RePEc:spr:nrmchp:978-3-319-03140-8_6
    DOI: 10.1007/978-3-319-03140-8_6
    as

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