Ethanol became more competitive than gasoline in Brazil in June, as a larger sugarcane harvest increased supply and pushed biofuel prices lower, according to CNN Brasil, citing a fuel price monitor by mobility company Veloe with technical support from the Fundação Instituto de Pesquisas Econômicas (Fipe), a São Paulo-based economic research foundation.
The average price ratio between ethanol and gasoline fell to 67.9% nationwide, the lowest level since March 2024. That put ethanol below the 70% benchmark often used in Brazil to decide whether the biofuel is economically preferable to gasoline in flex-fuel cars, which are common in the country.
In state capitals, the ratio also declined, reaching 68.5%. CNN Brasil said the figures point to a gain in ethanol competitiveness in major urban centers, though regional differences remain.
Harvest Effect
The improvement came mainly from a 4.7% drop in the average price of hydrated ethanol in June compared with May. It was the steepest monthly decline among the fuels tracked in the survey.
Hydrated ethanol, the fuel sold directly at Brazilian pumps for flex-fuel vehicles, ended June at an average of R$4.26 per liter nationwide and R$4.42 per liter in the capitals. The survey reported local prices in Brazilian reais and did not provide dollar equivalents.
CNN Brasil attributed the decline to higher sugarcane crushing, which increased ethanol supply and pressured prices downward. Brazil is one of the world’s largest sugarcane producers, and the crop is central to the country’s ethanol market.
Gasoline prices moved far less. Regular gasoline fell 0.3% in June to R$6.72 per liter, while premium gasoline also declined 0.3%, to R$6.86 per liter.
Diesel Still Up in 2026
Diesel prices also eased in June, though they remain sharply higher for the year. Regular diesel dropped 2% in the month to R$6.988 per liter. S-10 diesel, a lower-sulfur fuel widely used in newer diesel engines, fell 1.4% to R$7.111 per liter.
Compressed natural gas for vehicles was the only fuel tracked by the survey to rise in June. Its price increased 1.4%, reaching R$4.654 per cubic meter.
Despite the recent monthly declines, diesel has posted the largest accumulated price increase among the fuels tracked in 2026. S-10 diesel is up 15.1% for the year, while regular diesel has risen 14.1%. Regular gasoline has increased 7.1%, and premium gasoline is up 6.8%.
Ethanol is the exception. It is the only fuel in the survey with an accumulated decline in 2026, down 4.7%.
Oil Market Pressure
Mauro Kondo, Veloe’s B2B business superintendent, told CNN Brasil that June’s price behavior mainly reflected the increase in ethanol supply linked to the 2026/27 harvest. He said that higher ethanol availability improved its competitiveness against gasoline, while petroleum-derived fuels remained tied to both international market conditions and domestic price pass-through dynamics.
The survey also cited lower tension in the international oil market and the partial resumption of vessel flows through the Strait of Hormuz as factors that helped ease some pressure on petroleum-derived fuels.
Even so, CNN Brasil reported that domestic demand remains high, supported by economic activity and Brazil’s heavy reliance on road transport. That demand limits the scale of price declines reaching consumers.