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Economy & Energy
No 36:  February-March 2003 
ISSN 1518-2932

seta.gif (5908 bytes)No 36 Em Português

 

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Alcohol  Irregular Trade

Long Term “Equilibrium” Exchange Rate

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The Solely Peaceful use of Nuclear Energy

Thermodynamics Application to the Evaluation  of Fluvial Networks Equilibrium  - the  river Santo Antonio basin

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ALCOHOL IRREGULAR TRADE

João Antonio Moreira Patusco
patusco@ecen.com

Brasília, February 7, 2003

OBJECTIVE: Evaluation of alcohol supply and demand from 1999 to 2000 by comparing and analyzing data from different institutions

HEADLINE: It is estimated to be 8 million cubic meters the irregular trade of ethyl alcohol in the last four years – an amount equivalent to 17% of the total alcohol consumption in the period.

 MESSAGE: The statistics produced by the Ministry of Mines and Energy should include official and non-official data so that it represent the real energy supply and demand in the country. Studies regarding the expansion of alcohol consumption that use information from the National Petroleum Agency (ANP, Agência Nacional de Petróleo in Portuguese) can contain significant margin of error.

In Brazil, Otto cycle vehicles consume pure gasoline, gasoline mixed with anhydrous alcohol, hydrated alcohol and natural gas.

Most Otto cycle vehicles are used for individual transport and practically the whole existing fleet is composed of light vehicles. It is estimated that there were 15.7% million gasoline vehicles and 2.2 million alcohol vehicles at the end of year 2002. The natural gas fleet is close to 500 thousand vehicles.

The increase of purchase power due to the Real Plan in 1994 together with depressed demand gave to the Brazilian population access to durable consuming goods. The 48.4% consumption increase of Otto cycle fuels in the period from 1993 to 1998 (from 14,352 thousand toe – ton petroleum equivalent – to 21,305 thousand toe) is a good example that proves the large expansion of the cars market. From 1999 on, due to the real devaluation relative to the dollar and the following adjustment of gasoline prices, the consumption of this fuel decreased and accumulated a reduction of 12.7% until 2002.

 VEHICLE CONSUMPTION

     thou toe

SPECIFICATION

1999

2000

2001

2002

GASOLINE

13664

13582

13223

12163

ANHYDROUS ÁLCOHOL

3121

2967

3124

3338

HYDRATED ÁLCOHOL

3497

3016

2550

2286

NATURAL GÁS

136

268

490

816

TOTAL

20418

19833

19387

18603

ANNUAL GROWTH RATE (%)

-4,2

-2,9

-2,2

-4,0

Ethyl alcohol, that had decreased its participation in the total fuel consumption (from 32.4% in 1999 to 29.3% in 2001) due to the reduction of hydrated alcohol vehicles sales and its respective fleet , presents some recovery, namely 30.2%. The fact of increasing the alcohol content in the gasoline mixture to 25% was one of the reasons, however, alcohol prices, much lower than those of gasoline, have induced the increase of hydrated alcohol vehicle sales, as well as the alcohol addition to gasoline vehicles.

Natural gas, due to the fact that it is economical relative to alcohol and gasoline has been presenting a strong penetration in vehicle consumption, already represents 4.4% of the total.

STRUCTURE OF OTTO CYCLE IN  toe

%

SPECIFICATION

1999

2000

2001

2002

GASOLINE

66,9

68,5

68,2

65,4

ANHYDROUS ÁLCOHOL

15,3

15,0

16,1

17,9

HYDRATED ÁLCOHOL

17,1

15,2

13,2

12,3

 NATURAL GAS

0,7

1,4

2,5

4,4

TOTAL

100,0

100,0

100,0

100,0

 

NATURAL GÁS FOR VEHICLE

milli m3

SPECIFICATION

1999

2000

2001

2002

CONSUMPTION (*)

159

313

572

952

ANNUAL GROWTH RATE (%)

 

96,9

82,7

66,4

(*) State  gas distributors

In the present study data from four institutions were used in order to analyze supply and demand of Otto cycle fuel: (i) the ANP that has an information system that consolidates data from sales by Distributors, by fuel, as well as data concerning production and stocks of petroleum products; (ii) the Sugar and Alcohol Department of the Agriculture Ministry that follows production, outputs and stock of alcohol by producers; (iii) the External Trade Secretariat that records the Brazilian exports and imports of goods and (iv) DATAGRO, an institution specialized in sugar and alcohol issues and that follows the evolution of vehicle fuel consumption as recorded by producers and distributors.

The analysis of the available material shows that the data concerning apparent consumption of anhydrous and hydrated alcohol from DATAGRO are in accord with supply data and the present news about the low alcohol stocks at the end of 2002, that is unable to satisfy consumption in the first months of 2003 – in February the percent of anhydrous alcohol mixed with C gasoline dropped from 25% to 20%, a preventive measure for reducing consumption, due to probable shortage. The “output” data relative to vehicle anhydrous and hydrated alcohol from the Sugar and Alcohol Department are close to those from DATAGRO.

In the following table the negative quantities in the stock variation line represent the amount that have been subtracted from the existing regulating stocks due to demand larger than supply. In four , about 5,340 thousand m3 have been subtracted from the alcohol stocks. It should be observed that at the beginning of 1999, due to the large regulating stocks, alcohol prices have had a significant decrease in the market.

SUPPLY AND  DEMAND OFETHYL ÁLCOHOL

thou  m3

SPECIFICATION

1999

2000

2001

2002

ÁLCOHOL PRODUCTION (*)

12981

10700

11466

12589

VEHICLE CONSUMPTION - DATAGRO

13053

11786

11149

11028

NON ENERGY USES (*)

1187

1238

1318

931

NET EXPORTS (**)

34

163

202

757

STOCK VARIATION

-1323

-2487

-1324

-206

LOSSES (*)

30

0

121

79

(*)Sugar and Alcohol Department of the  Agriculture Ministry

(**) External Trade Secretariat

Pure gasoline mixed with anhydrous alcohol has been presenting negative performances since 1999 and in 2002 it has decreased 8%. In what concerns anhydrous alcohol it has increased 6.8% in 2002 according to DATAGRO. Considering data from ANP relative to C gasoline sales, the results indicate a smaller anhydrous alcohol consumption, as shown in line (f) of the following table. The four last years accumulate a consumption of less than 2,530 thousand m3 compared  with data from DATAGRO.

Considering anhydrous data from DATAGRO, the percent of mixtures in C gasoline are increasing in 2001 and 2002 and it has reached 28.9% in the latter. This percent could be larger in about 3% if one takes into account that hydrated alcohol is being added to gasoline vehicles.

C GASOLINE CONSUMPTION (GASOLINE + ANHYDROUS ÁLCOHOL

thou  m3

SPECIFICATION

1999

2000

2001

2002

(a) PURE GASOLINE (*)

17722

17616

17150

15776

(b) ANHYDROUS ÁLCOHOL (**)

6002

5705

6008

6419

(c) = (a)+(b)C GASOLINE (MXTURA)

23724

23321

23158

22195

(d) = (b) / (c) % AHYIDROUS IN MIXTURE

25,3

24,5

25,9

28,9

(e) C GASOLINE - Distributor Sales (*)

23660

22565

21916

21727

(f) = (c) - (e)

64

756

1242

468

%  GROWTH OF PURE GASOLINE

 

-0,6

-2,6

-8,0

(*) Agência Nacional de Petróleo – ANP

(**) DATAGRO - Boletim Informativo Quinzenal Ano 2002, Edição 16P, page 16 - S.Paulo, SP, Brasil

Analysis of data relative to vehicle hydrated alcohol, similar to anhydrous alcohol, indicate much lower amounts in the ANP’s records. The last four years accumulate less 5,474 thousand m3 in these records.

VRHICLE HYDRATED  ÁLCOHOL CONSUMPTION 

thou m3

SPECIFICATION

1999

2000

2001

2002

(a) DATAGRO (*)

7051

6081

5141

4609

(b) ANP - SALES OF DISTRIBUTORS

6015

4546

3356

3491

(c) = (a) - (b)

1036

1535

1785

1118

(*) DATAGRO - Boletim Informativo Quinzenal Ano 2002, Edição 16P, page 16 - S.Paulo, SP, Brasil

A simple evaluation shows that if the ANP figures were considered , in the last four years less 8,004 thousand m3 would have been consumed and therefore the alcohol stocks would be very high, what is not real.

Even if the figures do not represent the true reality of facts, it should be reckoned a significant tax evasion in the commercialization of ethyl alcohol. The figures show that in 2001 the irregular alcohol trade may have reached 27% of the total consumption.

PRESUMED ETHYL ÁLCOHOL TAX EVASION

thou l m3

SPECIFICATION

1999

2000

2001

2002

SUM OF  DIFFERENCES (DATAGRO x ANP)

1100

2291

3027

1586

%  ON  VEHICLE ALCOHOL

8,4

19,4

27,2

14,4

            Considering the alcohol “output” data for fuel purposes in the last four years from the Sugar and Alcohol Department, the alcohol regulating stocks are subtracted of 4,385 thousand m3, the accumulated irregular trade reaches 7,049 thousand m3 and the percent of anhydrous alcohol mixture in C gasoline is more than 30% in 2002.

Graphic Edition/Edição Gráfica:
MAK
Editoração Eletrônic
a

Revised/Revisado:
Tuesday, 11 November 2008
.

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It is estimated to be about 8 million cubic meters the irregular trade of ethyl alcohol in the last four years – an amount equivalent to 17% of the total alcohol consumption in the period.