By Akracia – Fenikso Nigra
Since August 2025, Brazilian gasoline contains 30% anhydrous ethanol. Government promised drop of up to R$ 0.20 per liter. In December, average price was R$ 6.19. Practically the same as January: R$ 6.17. The reduction was R$ 0.02.
In January 2026, ICMS rose R$ 0.10 per liter. Gasoline became more expensive than before the change.
Promise not fulfilled. But someone profited.
Mandatory ethanol blend has existed since 1975. Percentage varies according to political conveniences and sugarcane energy sector pressures. It went from 18% to 27.5%, then to 30%. Each increase is sold as environmental achievement and reduction of oil dependence.
In practice, it functions as market guarantee for mill owners.
Legislation creates compulsory demand. Consumer doesn’t choose ethanol proportion they buy. State mandates blend, guarantees production flow, protects sugarcane agribusiness profits. Risk of bad harvest or low price disappears when 30% of all fuel sold in country must be ethanol.
The math is simple. Brazil consumes about 60 billion liters of gasoline per year. With 30% ethanol, that’s 18 billion liters of demand guaranteed by law. Mills don’t need to compete, don’t need to offer attractive price. They just need to produce.
Environmental discourse accompanies the measure. Ethanol reduces emissions, they say. Studies show drop from 148 grams of CO2 per kilometer to 83 grams. Number impresses until examining where Brazilian ethanol comes from.
Sugarcane monoculture occupies millions of hectares. Expands over native vegetation areas, competes with food production, concentrates land in large properties. Harvest work remains precarious despite mechanization. Burns to facilitate cutting pollute city air for months.
Ethanol’s sustainability is questionable when considering complete production cycle.
The promise of low price never materialized for structural reason. Ethanol doesn’t compete with gasoline, it anchors to it. Mills calculate price of hydrated alcohol sold directly to consumers based on gasoline value. Market rule establishes ethanol is advantageous when it costs up to 70% of gasoline price.
This “rule” isn’t natural law. It’s convention created and maintained by those who sell fuel. In December 2025, national parity was at 72.19%. Ethanol advantageous in only one state: Mato Grosso do Sul.
Ethanol price rises when gasoline rises. Falls less when gasoline falls. Asymmetry convenient for producers, costly for consumers.
Tax structure completes the system. Gasoline pays fixed ICMS of R$ 1.57 per liter, PIS/Cofins of about R$ 0.68, plus distribution and retail margin of approximately R$ 1.27. Totals R$ 3.52 before counting Petrobras cost (R$ 1.80) and mixed ethanol (R$ 0.98).
Government collects more when fuel is expensive. ICMS and PIS/Cofins yield billions that finance state machine and debt interest payment. State’s fiscal interest aligns with commercial interest of oil companies and mill owners.
Alternatives exist but remain marginal. Electric vehicles face insufficient charging infrastructure, high prices, taxation that doesn’t encourage adoption. Quality public transport that would reduce car dependence remains underfunded in most cities.
Residential solar energy to charge electric vehicles faces bureaucracies, taxes on own generation, distributor lobbies. Creating individual or community energy autonomy runs into regulatory barriers built to protect monopolies.
The power project isn’t hiding oil or ethanol. It’s keeping population dependent on distribution networks controlled by few. Whether Petrobras gasoline, mill ethanol or utility energy, structure is similar: centralized production, monopolized distribution, prices defined far from who consumes.
Energy autonomy experiences exist. Rural communities in various parts of Brazil generate own energy through collective solar panels, biodigesters, small community hydroelectric plants. Scale is small, but demonstrates technical viability.
In India, social movements organized solar energy cooperatives serving entire villages. Collective initial investment, community management, drastic reduction of dependence on external networks. Model doesn’t eliminate technical challenges, but redistributes power over essential resource.
Denmark developed system where wind cooperatives belong to local communities. Energy generation profits stay in region, expansion decisions are made by those who live in territory. Country still has national grid, but significant portion of energy comes from decentralized production.
In Brazil, energy regulation hinders replication of these models. Regulatory agencies protect utilities, taxation penalizes own generation, bureaucracy makes small community projects unfeasible. Not due to technical impossibility, but political choice to maintain concentration.
The 30% ethanol blend didn’t bring what it promised. Price didn’t fall, fossil fuel dependence decreased marginally, emissions remain problematic considering complete cycle. But it fulfilled unannounced function: guaranteed market for sugarcane energy sector, maintained high taxation, preserved dependence structure.
Between accepting energy as commodity controlled by few and building community energy autonomy, no neutrality is possible.
In struggle we continue—dignified, free, and untamable.