Antonio Moreira Patusco
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.
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.
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.
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.
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.
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.
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:
Tuesday, 11 November 2008.
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.