Sao Paulo state cuts ethanol ICMS tax to help boost competitiveness against gasoline

In Brazil, Reuters reports that Sao Paulo state is trying to help increase ethanol’s competitivity against gasoline by cutting the ICMS tax on ethanol to 9.57% from 13.3%, which the government says could cut fuel costs by 3 cents per liter at the pump. The ICMS tax on gasoline was already cut to 18% from 25% back in June. Minas Gerais’ governor, who is up for reelection, already cut the ICMS tax on ethanol to 9% from 16% previously. As ethanol only has about 70% of the energy content as gasoline, ethanol must be at least 30% cheaper than gasoline for drivers to choose it at the pump.

Category: Policy