The sugar-ethanol-oil nexus in Brazil: Exploring the pass-through of international commodity prices to national fuel prices

What is it about?

In this study, we explore how changes in global energy and agricultural markets affect the prices of fuel in Brazil. This is important because it helps policymakers make informed decisions and helps businesses manage risks related to fuel prices. We focused on Brazil because it's a major supplier of ethanol, which is widely used around the world. We looked at data from 2015 to 2020 and used a special analysis technique to understand how different factors affect fuel prices. Here's what we found: When the prices of a type of fuel called RBOB went up, it had both short-term and long-term effects on gasoline prices in Brazil. We also conducted tests to see if these changes were directly causing each other, and it turns out that changes in heating oil prices do have a noticeable impact on Brazilian ethanol prices. Overall, our findings have important implications for policymakers and businesses in the energy sector. It helps them understand how global market changes can affect fuel prices in Brazil, and it gives them ideas for future research in this area."

Featured Image