Gasoline vs. Ethanol in Brazil: Why Biofuel Is Winning the Price Battle

Hydrous ethanol has become more competitive against gasoline in Brazil as prices continued to fall in the second week of May, driven by the sugarcane harvest in the country's Center-South region.

According to data analyzed by fleet management firm Veloe, the price ratio between ethanol and gasoline dropped to 69.7% in early May, down from 71.7% in late April. This falls below the critical 70% threshold typically used by owners of flex-fuel vehicles to determine the economic advantage of biofuel over fossil fuels.

A flex fuel car is basically a vehicle whose motor is made so it can run on ethanol, on gasoline, or on some blend of both, and honestly in any proportion. The real little “secret” behind this whole thing is the electronic control unit, also called the injection module. It can identify what fuel is being used and then it automatically tweaks the engine settings, so it aims for the best performance and efficiency. The world’s first mass-produced flex-fuel car was launched in Brazil in 2003: the Volkswagen Gol Total Flex 1.6. From that milestone, this know how spread pretty fast, picking up popularity among the big automakers that are already established in the country. Today, this type of vehicle can be seen everywhere in Brazil.

ETHANOL VS. GASOLINE COMPETITIVENESS

The deepening decline in ethanol prices, which began in mid-April, contrasts with the more moderate price adjustments seen in other fuels:

• Gasoline: Dropped 0.27% to an average of 6.76 reais per liter.
• S-10 Diesel: Decreased 1.27% to an average of 7.21 reais per liter.

"The market is closely monitoring the evolution of the harvest, alongside factors such as global oil prices, exchange rates, and the production mix between sugar and ethanol," Veloe, a subsidiary of Elopar (controlled by Banco do Brasil and Bradesco), said in a statement.

REGIONAL PRICE DROPS

The sharpest absolute price drops for ethanol were concentrated in Brazil's agricultural heartland, reflecting the impact of the ongoing harvest:

• Goiás: -4.9%
• São Paulo: -4.7%
• Federal District: -4.6%
• Minas Gerais: -4.2%
• Mato Grosso: -4.1%

Analysts suggest that the increased supply from the Center-South harvest is the primary driver behind these regional declines, providing relief to consumers and improving the biofuels' market share.

Flávio Bolsonaro Scandal: Contradictions Mount in $24M "Dark Horse" Film Funding Case

Brazilian Senator and presidential hopeful Flávio Bolsonaro faces mounting pressure as new contradictions emerge regarding his ties to jailed banker Daniel Vorcaro and the $24 million (134 million reais) funding for a biopic about his father, former President Jair Bolsonaro — who is imprisoned for the crime of attempted coup d'état.

The scandal, dubbed by some political analysts as a "slow-release revelation," has triggered a decline in Flávio’s poll numbers and raised serious questions about campaign finance legality and potential "slush funds" (caixa dois).

TIMELINE OF CONTRADICTIONS

The controversy has been marked by a series of shifting versions from the Bolsonaro camp:

• Initial Denial: When first confronted by Intercept Brasil reporters, Flávio Bolsonaro laughed off the allegations, calling the journalist a "militant."
• Forced Admission: Hours later, the senator admitted to seeking "private sponsorship" from Vorcaro but claimed the contact occurred before the banker’s legal troubles became public.
• The Meeting: This week, Flávio was forced to admit to a face-to-face meeting with Vorcaro while the banker was already wearing an electronic ankle monitor.

THE "DARK HORSE" FUNDING MYSTERY

Conflicting accounts from the film’s production team have added to the confusion:

1. GOUP Entertainment: The production company initially denied receiving any funds from Vorcaro, later suggesting he was merely an "intermediary" for anonymous donors.
2. Mário Frias: The executive producer and congressman first denied Vorcaro’s involvement, then backtracked, admitting a partnership with "Entre Investimentos," a firm closely linked to the banker.
3. Eduardo Bolsonaro: The senator’s brother initially denied involvement but later admitted to signing a contract as executive producer and advancing funds for the project.

POTENTIAL LEGAL AND ELECTORAL CONSEQUENCES

While the Superior Electoral Court (TSE) states there is currently no legal impediment to Flávio’s candidacy, the situation could shift rapidly. Investigators are focusing on whether the film, titled Dark Horse, could be classified as "irregular campaign propaganda" if released during the election cycle.

Furthermore, if the $24 million negotiated with Vorcaro is proven to be corporate funding rather than personal donations, it would violate Brazilian electoral law, potentially leading to charges of abuse of economic power.

IMPACT ON 2026 PRESIDENTIAL POLLS

The latest Atlas Intel poll shows center-left President Luiz Inácio Lula da Silva leading with 47%, while the far-right candidate Flávio Bolsonaro has slipped to 34.3%. Analysts suggest that while Flávio retains a loyal base of approximately 30% of the electorate, the "bleeding" of moderate supporters could favor other far-right candidates like Renan Santos, Romeu Zema, or Ronaldo Caiado — all three willing to coerce the Supreme Federal Court (STF) through force, meaning they all openly hold positions that put Brazilian democracy at risk.

Therefore, Brazil's conservative movement is facing significant volatility ahead of the 2026 presidential race due to the financial controversy surrounding Senator Flávio Bolsonaro’s film project. This scandal has weakened his candidacy, fragmented potential alliances, and prompted alternative right-wing figures.

While high rejection rates and skepticism complicate Flávio's path, the Bolsonaro family remains a dominant political force. Consequently, the Brazilian far-right is currently divided between maintaining loyalty to the Bolsonaro brand, which is immersed in the biggest political scandal in Brazilian history, or searching for an alternative far-right candidate for the upcoming election cycle.

São Paulo Set for Record Biomethane Production, Targeting 1 Million Cubic Meters Daily

After the Brazilian federal government published on May 6 the Resolution 4/2026 of the National Energy Policy Council (CNPE), which sets an annual targets for greenhouse gas (GHG) emissions, the state of São Paulo is on track to reach a record installed production capacity of 1 million cubic meters of biomethane per day by the end of 2026, enough to supply all 2.8 million residential gas connections in the state, officials said.

The volume, equivalent to replacing approximately 4,000 diesel-powered urban buses, marks a major milestone in Brazil’s energy transition. São Paulo currently hosts nine of the 19 biomethane plants operating nationwide, with another 11 units awaiting authorization.

"We are preparing to reach the record mark of approximately one million cubic meters per day by December," Marisa Barros, Undersecretary for Energy and Mining at the State Secretariat for Environment, Infrastructure, and Logistics (Semil), told an industry event last week.

DECARBONIZING LOGISTICS

The surge in biomethane — a renewable gas produced from agricultural and landfill waste — is central to São Paulo’s strategy to hit net-zero emissions by 2050. Heavy vehicles, such as trucks and buses, are primary targets for conversion to the renewable fuel, which can reduce greenhouse gas emissions by up to 99% compared to diesel.

In the city of São Paulo, the "BioSP" program is already testing biomethane-powered buses to bypass infrastructure bottlenecks currently hindering electric vehicle adoption.

CORPORATE ADOPTION

Major industries are already integrating the fuel into their operations:

• Natura: The cosmetics giant uses biomethane to power 45% of its industrial processes and 100% of its logistics fleet between its Cajamar factory and Greater São Paulo.
• Aviation Sector: Projects are underway to produce Sustainable Aviation Fuel (SAF) from biogas derived from sugarcane waste, supported by international partnerships with institutions like Sweden’s Swedfund.

REGULATORY MOMENTUM

The National Petroleum Agency (ANP) has streamlined authorization processes to align with Brazil’s "Fuel of the Future" law. "We noticed a significant increase in requests for new industrial plants, driven by recent federal and state incentives," said Marcos Werner, a superintendent at the ANP.

Beyond São Paulo, other states are also advancing:

• Santa Catarina: H2A Bioenergia recently received authorization for the country’s first biomethane plant using swine waste.
• Rio Grande do Sul: State distributor Sulgás launched the "BioHub" to connect remote producers to the existing gas grid, aiming to diversify the state’s energy portfolio and reduce reliance on external sources like Bolivia or offshore pre-salt gas.

CIRCULAR ECONOMY

The expansion of biomethane is being framed as an economic opportunity for small farmers and agribusinesses to monetize organic waste. State environmental agency Cetesb has modernized its licensing procedures, reducing approval times to as little as 60 days to accelerate the transition.

"Biomethane is a strategic pillar in decarbonization," said Allan Cellim da Silva of Cetesb. "It integrates the biofuel into the circular economy while ensuring a secure and agile transition for the industry."

Petrobras (PETR3; PETR4) Aims for Brazil's Diesel Self-Sufficiency by 2030 with $6.4 Billion Investment

State-run oil giant Petrobras committed on Monday to making Brazil self-sufficient in diesel production by 2030, announcing 37 billion reais ($6.4 billion) in investments for São Paulo state through the end of the decade.

The announcement, made by Petrobras CEO Magda Chambriard, marks a significant shift in the company’s strategic ambition, moving from an original target of 85% domestic diesel coverage to a goal of 100%.

"We have committed to President Lula to be self-sufficient in diesel in this country by 2030," Chambriard told reporters during an event at the Replan refinery, Brazil’s largest processing unit.

ENERGY SECURITY PUSH

The push for self-sufficiency comes amid heightened global geopolitical tensions, particularly the conflict involving the United States and Iran, which has spiked concerns over global energy supply chains and price volatility.

"In this troubled moment of war... concerns regarding our country's energy security are exacerbated," Chambriard said. "Every country is discussing its energy security, and Brazil is no exception."

Petrobras currently supplies approximately 75% of Brazil’s diesel. The company plans to increase its refining capacity to bridge the remaining gap, reducing the country’s vulnerability to international price swings and import dependencies.

REFINING HUB

São Paulo state, which handles half of Petrobras’ total refining and 40% of Brazil’s fuel consumption, will be the heart of this expansion.

• Refining Investment: 17 billion reais will be allocated to refining projects.
• Replan Focus: 6 billion reais will go to the Replan refinery in Paulínia to expand its processing capacity by 63,000 barrels per day, specifically targeting high-value S10 diesel.
• Broader Network: An additional 11 billion reais will be invested across the Revap, RPBC, and Recap refineries.

The CEO noted that increased diesel production will naturally boost gasoline output, further improving domestic fuel availability.

OFFSHORE AND RENEWABLES

Beyond refining, Petrobras will invest 9 billion reais in offshore exploration and production in São Paulo’s pre-salt fields, including the new "Arã" area and upgrades to the Sapinhoá and Mexilhão fields. The investment package also includes:

• Port of Santos: 3.3 billion reais to expand the water terminal and storage capacity.
• Energy Transition: Projects for sustainable aviation fuel (SAF) using recycled cooking oil and a new photovoltaic plant for Replan’s internal consumption.

Petrobras estimates the investment cycle will generate approximately 38,000 direct and indirect jobs in São Paulo by 2030. "São Paulo is the largest consumer market in Brazil, and Petrobras cannot and does not intend to be absent from it," Chambriard concluded.

Banco Master Scandal Sends Flávio Bolsonaro’s Poll Numbers Crashing

Support for Brazilian far-right presidential pre-candidate Flávio Bolsonaro has dropped significantly following the leak of audio messages linking him to a jailed banker, according to a new Atlas Intel/Bloomberg poll released on Tuesday.

The survey is the first to measure the impact of the "Banco Master" scandal on the 2026 presidential race. It shows President Luiz Inácio Lula da Silva solidifying his lead while Flávio, the eldest son of former president Jair Bolsonaro (imprisoned for the crime of attempted coup d'état), "melt" in both first and second-round scenarios.

KEY POLL FINDINGS

• First Round: President Lula leads with 47% of intentions, while Flávio Bolsonaro fell 5.4 percentage points to 34.3%.
• Second Round: Lula holds 48.9% against Flávio’s 41.8%, moving beyond the margin of error for the first time in months.
• Alternative Candidate: If the Liberal Party (PL) runs former first lady Michelle Bolsonaro instead, she trails Lula with 23.4%, as a portion of the right-wing vote migrates to other candidates like Romeu Zema.

SCANDAL PERCEPTION

The poll specifically addressed the leaked audio in which Senator Flávio Bolsonaro requested $24 million from Daniel Vorcaro, the former owner of Banco Master.

• Guilt: 51.7% of respondents believe the messages provide evidence of direct involvement in financial fraud, while 33.3% accept the senator's version that it was a legitimate attempt to fund a film about his father.
• Political Fallout: 43.3% of Brazilians now associate the Banco Master scandal primarily with "Bolsonaro allies," a sharp shift from earlier months when the issue was more closely linked to the current government in public perception.

LEGAL CHALLENGE

The polling methodology has drawn fire from the Bolsonaro camp. Senator Rogério Marinho announced plans to sue Atlas Intel, alleging the survey "induced" negative responses by playing the leaked audio for participants before they answered questions about the scandal's impact.

Atlas Intel defended its approach, stating the audio was part of an "appendix" played only after the primary election and approval questions were completed.

Despite the controversy, analysts say the "bleeding" of support is a devastating blow to Flávio’s campaign, which had previously been in a dead heat with the incumbent president.

ANALYSIS

Former Brazilian President Jair Bolsonaro’s determination to keep his eldest son, Flávio, as the standard-bearer for the right in the 2026 presidential race is triggering a wave of internal resistance and exposing deep fractures within the "Bolsonarismo" movement.

Political analysts and insiders suggest that while Senator Flávio Bolsonaro’s support is "melting" in recent polls following a financial scandal, the patriarch’s primary goal remains the preservation of the family’s political monopoly of the far-right in Brazil rather than a guaranteed electoral victory.

A FRAGMENTED FRONT

The insistence on Flávio’s candidacy has alienated key figures within the right-wing spectrum:

• The "New Right" Leaders: Figures such as Congressman Nicolas Ferreira and potential presidential hopefuls like Romeu Zema and Ronaldo Caiado are navigating a delicate balance. They cannot openly break with Bolsonaro for fear of alienating his loyal base.
• Internal Rivalries: Former first lady Michelle Bolsonaro and São Paulo Governor Tarcísio de Freitas are reportedly sidelined by the family’s "inner circle," which prioritizes blood relatives over broader political alliances.

THE "POLITICAL MONOPOLY" STRATEGY

In fact, Bolsonaro doesn't want to win the election as much as he wants to keep the monopoly of the right. By imposing his son, Bolsonaro aims to keep the "centrão" (Brazil’s powerful far-right political bloc, deeply focused on political opportunism) and other right-wing factions dependent on his endorsement.

Analysts point out that the movement’s emergence since 2015 was capitalized on by Bolsonaro, but it is not synonymous with him. This creates a paradox: many allies are privately relieved by the family’s legal and political setbacks but remain publicly subservient to maintain their own electoral viability.

RESILIENCE THROUGH ALTERNATIVE NARRATIVES

Despite the Banco Master scandal, where, experts attribute this resilience to the movement’s ability to bypass traditional media and sustain "negationist" narratives through messaging apps like WhatsApp.

Unfortunately, the supporters of Bolsonaro are prone to believe any excuse, pointing to the defense that the funds that Flávio was asking Vorcaro for were "private investments" for a film as a sufficient justification for the core base — this is not true because Bolsonaro-supporting mayors and governors injected billions of public money into Banco Master.

MARKET SKEPTICISM

The tension extends to the financial sector. While parts of the "Faria Lima" (Brazil’s Wall Street) remain aligned with the right, there is growing skepticism regarding Flávio’s administrative capacity and credibility.

While financing a private film is not a crime in Brazil, federal investigators are now probing whether the $24 million (134 million reais) deal for the biopic "Dark Horse" served as a front for illicit financial transfers. Furthermore, investigators have identified that Marcelo Calixto — an immigration lawyer and manager of the fund — purchased a $630,000 (3.6 million reais) residence in Texas, where Eduardo Bolsonaro currently resides. Brazilian Political Analysts describe these overlapping financial interests as "highly suspicious. The timing and scale of the payments — totaling 61 million reais in just four months — have led to allegations of pre-campaign slush funds, which is a criminal offense under Brazilian electoral law. The production company of the movie, GOUP Entertainment, has yet to definitively disprove claims that the funds were diverted from the film's actual production costs. Besides all this, Bolsonaro's crisis management is at its worst. All the responses they give lasts more than 24 hours before being contradicted by new evidence. Above that, industry comparisons show that the "Dark Horse" budget exceeds that of several recent Oscar-winning films, such as "The Zone of Interest" ($15 million) and "Moonlight," raising further questions about the necessity and destination of the 134 million reais originally negotiated with Vorcaro.

However, without a viable alternative sanctioned by the former president, the right and the far-rigth in Brazil remains locked in a strategy that prioritizes family loyalty over institutional stability and a democratic state governed by the rule of law, especially since Flávio Bolsonaro has already told Folha de S. Paulo that if elected he will release his imprisoned father even if it means going over the Supreme Court by force.