Diesel is a reason for heavy arm wrestling between Economy and Agriculture in Brazil

RIO DE JANEIRO, BRAZIL – The Ministries of Economic and Agriculture are fighting over the percentage of biodiesel mixed with diesel.

Paulo Guedes’ Ministry wants to reduce the amount of biodiesel in fossil fuels to contain the increase in diesel prices. Agriculture is asking for the opposite since more biodiesel in the mix leads to higher soy consumption, the raw material used to produce the product.

The price of diesel is the main component of the dissatisfaction of truck drivers with Jair Bolsonaro’s government. The measure defended by the Ministry of Economy aims to meet the president’s promises to the category to the detriment of other stakeholders in the issue.

As arguments in defense of biodiesel, the defenders of the product point out the generation of jobs in the soy chain and environmental benefits. Diesel is imported and, therefore, would generate far fewer jobs in Brazil.

A schedule established by the government in 2018 provided that the percentage of the mixture should be 12% currently. In a National Energy Policy Council (CNPE), the Ministry of Economy tried to reduce this number to 6%. In the face of protests from Minister Tereza Cristina’s portfolio, a percentage of 10% was agreed upon.

The decision “reconciled society’s interest in fuel prices with the maintenance of the national policy for biodiesel and environmental aspects”, explained the Ministry of Mines and Energy (MME), which chairs the CNPE. The MME defends the decision. According to the agency, there would be an “additional cost to society of R$ 6.7 billion in the year 2022

Now, the battle between the two ministries will change scenery. The Rural Caucus in Congress is evaluating which step to take to enforce the original schedule. Among the possibilities are negotiations between the congressmen and the Executive or a reaction in the House and Senate.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error