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

  • Márcia Azanha Ferraz Dias de Moraes
  • David Zilberman
Chapter
Part of the Natural Resource Management and Policy book series (NRMP, volume 43)

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.

Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  • Márcia Azanha Ferraz Dias de Moraes
    • 1
  • David Zilberman
    • 2
  1. 1.Luiz de Queiroz College of Agriculture (ESALQ) Economics, Business and Sociology DepartmentUniversity of São PauloPiracicabaBrazil
  2. 2.Agricultural and Resource EconomicsUniversity of CaliforniaBerkeleyUSA

Personalised recommendations