Brazil will need to import an extra 250-500 million liters of gasoline a month -- about five to ten times current import levels -- to meet domestic demand following a decision by the government to reduce the ethanol mix in gasoline, industry observers said Wednesday.
The Ministry of Mines and Energy said Monday that the mix of ethanol in gasoline sold in domestic stations will be reduced to 20% from 25% from October 1, due to a growing ethanol shortage in the country.
Adriano Pires, director of the Brazilian Center for Infrastructure, said Wednesday that Brazil has imported about 3.1 million barrels, or about 370 million liters, of gasoline so far this year -- equivalent to about 46 million liters/month. In 2010, the country imported 505 million liters of gasoline, he said.
From October, this will increase to about 300-550 million liters/month, he said.
Analyst Monica Araujo from Sao Paulos Ativa expects gasoline imports to increase by 500 million liters/month from October.
"Petrobras is already importing and will need to import more. It is going to import more expensively than it will sell on the domestic market," she added.
In July, Pires said that state-owned Petrobras was importing gasoline at Real 1.35 ($0.85)/liter but having to sell at a regulated Real 1.05/liter at local pumps.
Pires said Wednesday: "Brazil's GDP grew 7.5% in 2010 and the consumption of gasoline 19%. This year, analysts are saying that the Brazilian economy will grow 4-4.5% and gasoline consumption has already grown 10%.
He added that with no new refineries due online before 2013, ethanol and gasoline production was not likely to increase in the short term.
