August 2009

Price Of Alcohol In Brazil Only 43% Price Of Gasoline

For many years the Brazilian government has kept the price of alcohol at about 55-60% the price of gasoline to give an incentive for consumers to purchase alcohol instead of gasoline. Pure alcohol gets about 70% the mileage of gasoline so the price of alcohol needs to be less than 70% the price of gasoline in order for consumers to choose alcohol over gasoline. The recent prices in Brazil are even more in favor of alcohol. In Sao Paulo, Brazil the current price of alcohol is right at R$ 1.00 per liter or about $1.90 a gallon. The price of gasoline is R$ 2.30 a liter or about $4.37 a gallon. In other words, alcohol is now priced at just 43% the price of gasoline. Its little wonder that over 90% of new cars in Brazil are flex-fuel cars and that everybody’s first preference is now alcohol. These prices were calculated using an exchange rate of two reals per dollar.

Now that Fiat may be a part owner of Chrysler maybe they will start selling in the U.S. some of their cars that are currently available in Brazil called tri-flex. These are cars that can run on natural gas, gasoline, alcohol, any combination of gasoline and alcohol. You can purchase them right off the showroom floor and they are very popular for use as taxies.