Brazil retail fuels long-term outlook

Brazil has the highest mandate for biofuel blending into gasoline worldwide at 27% (E27) with higher blends as well as hydrous ethanol (E100) also widely sold. This is supported by the country being the world’s largest producer of sugarcane. Car ownership is expected to continue to grow out to 2050 in line with GDP. The Brazilian car parc is unique as it is dominated by flexible-fuel cars that can run on either gasoline or ethanol or any blend of the two. The road transport fuel market is dominated by the top four large regional fuel distributors - Vibra, Raizen, Ipiranga and Alesat. Together with national oil company Petrobras they control the bulk of the supply infrastructure within the country. Brazilian law dictates that service stations can’t be owned by oil producers or distributors. Instead they are owned by independent third parties – usually individuals – and often branded under the logo of the main fuel distribution companies.