As global oil markets remain under pressure due to the ongoing conflict involving Iran, Brazil is managing to avoid major fuel price shocks, supported by its long-standing use of sugarcane-based ethanol, Associated Press reported.
In Brazil, millions of drivers can choose between pure ethanol or gasoline blended with about 30% biofuel, thanks to a large fleet of flexible-fuel vehicles. This system, introduced in 1975, has steadily reduced the country’s dependence on imported oil.
While fuel prices have surged sharply in many parts of the world, Brazil has seen a relatively small increase. Gasoline prices rose by about 5% in March, compared to a much steeper rise in countries like the United States. Experts say this is largely due to the country’s well-developed biofuel sector, which helps cushion the impact of global disruptions.
Evandro Gussi, head of the Brazilian Sugarcane Industry Association, said Brazil is better prepared than most countries because it has a reliable alternative to traditional fuels.
The country is also entering a new sugarcane harvest season, expected to begin in early April, with ethanol production likely to reach a record 30 billion litres—around 4 billion litres more than last year. This additional output is roughly equal to the total volume of gasoline Brazil imported last year.
Although Brazil produces and exports crude oil, it still depends on imports for refined fuels, sourcing supplies from countries such as the United States, Saudi Arabia, Russia and Guyana. Even so, ethanol plays a major role in daily fuel use, with sales reaching 37.1 billion litres in 2025.
The growth of the biofuel sector has been supported by years of research and development, particularly in São Paulo. Institutions like the University of Campinas have contributed to advances in ethanol production.
Luis Cortez said the country benefits from flexibility in production, vehicle use and government policies that set blending levels for ethanol.
However, diesel remains a weak spot. Prices rose by more than 20% in March, as diesel relies more on imported oil and contains a smaller share of biofuel.
Data from the Brazilian Association of Fuel Importers shows that domestically refined gasoline, which includes ethanol, is significantly cheaper than imported fuel. In contrast, diesel imports still account for a large share of demand.
To address rising diesel costs, President Luiz Inacio Lula da Silva has proposed temporary support measures to manage imports and keep prices in check.
Brazil’s approach is now drawing interest from other countries looking for ways to reduce fuel price shocks and strengthen energy security, with industry leaders saying the model could be adapted elsewhere.
