Sales of diesel type B by distributors in Brazil reached a monthly record of 6.23 billion liters in October, an increase of 8.1% compared to the same month last year, according to data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

The October results were boosted by the heating up of the Brazilian economy, said StoneX Market Intelligence analyst Isabela Garcia, in a note.

“The result extends and deepens the trend observed over the last year, as a more heated economy in several sectors drives demand for freight and, consequently, the consumption of diesel type B (already mixed with biodiesel),” said the specialist.

In the year to date through October, sales of diesel type B by distributors totaled 56.7 billion liters, an increase of 3.7% compared to the same period in 2023, showed data from the ANP.

“Consumption is expected to remain strong in the coming months, but it is less likely to repeat the result of October, and it should maintain a strong annual increase even with a probable slowdown in demand in December — seasonally expected for the month,” pondered Garcia.

Gasoline vs. hydrated ethanol
Gasoline sales in October reached 3.86 billion liters, an increase of 3.9% compared to the same month last year, while hydrated ethanol — its direct competitor at the pumps — totaled 1.86 billion liters, an increase of 14.4% in the same comparison.

“The recovery in gasoline consumption was expected amid the seasonal trend of strengthening consumption of light fuels as a whole in the fourth quarter, which supports sales of the fossil fuel even in a situation of less favorable parity (compared to ethanol) in some states,” said Garcia.

Year-to-date, however, gasoline sales still accumulated a drop of 4.5%, with a total volume of 36.5 billion liters sold in the period, said the ANP.

According to the expert, even if demand continues to grow in November and December, the consumption indicator is expected to end 2024 with a decline due to lower competitiveness compared to ethanol.

With prices in its favor, ethanol accumulated sales of 17.89 billion liters between January and October, representing an increase of 40.7% compared to the same period in 2023.

Source: Forbes