Brazil’s Senate has approved a legislation authorizing ethanol producers to sell the fuel directly to the fuel stations. After the 47-2 vote in the Senate, the bill should be voted by the House of Representatives.
Proposed by Senator Otto Alencar (PSD-BA), the bill aims to increase competition in the fuel market and lower the final price for the consumer.
The project cancels the article 6 of Resolution 43/2009, by the Brazilian Agency of Petroleum, Natural Gas and Biofuels (ANP), which states that an ethanol producer (supplier) may only market the product with another supplier registered with the ANP, with a distributor authorized by the agency or with the foreign market.
According to Senator Simone Tebet, the MDB leader in the Senate, the resolution is in accordance with current legislation and, therefore, the best way out for Congress would be to amend the legislation through a bill and not only to cancel the resolution article.
The bill divided the senators: some wanting the immediate vote on the bill and others asking for the debate to be expanded so that there would be more subsidies before the vote on the matter.
Otto Alencar said his project deals with hydrated ethanol, which is sold in automotive fuel pumps, not anhydrous ethanol, which is used to be mixed into gasoline. The senator said that this market is cartelized, which ends up increasing the final price to the consumer.
He added that producers should not be forced to sell biofuel directly, but would have more of that possibility. “The bill should not stop any distributors accredited by the ANP from distributing. They will keep on distributing.
For Humberto Costa (PT-PE), authorization for direct sales should have been made long ago by Congress. He said that intermediation to distribute alcohol is unnecessary in many cases and that the price of fuel should drop at the pumps. He added that there should be no collection losses for states and municipalities and that ANP should continue to monitor the quality of fuels throughout the country.
Senator Katia Abreu (PDT-TO) also supported the project that, in her opinion, should democratize the trading of ethanol. She said the current ban is a “protectionist and corporatist excrescence.”