Brazil's Petrobras told to pump up ethanol production immediately

Brazilian energy giant Petrobras expects demand for biofuels to soar within the next decade and will spend $3.5 billion over the next four years to at least double its biofuel output. However, Brazil's mines and energy minister Edison Lobao told Petrobras (a company that's partially owned by the Brazilian government) that, effective immediately, it will need to produce more ethanol. In a television interview, Lobao said:

Petrobras will now produce ethanol more intensively in order to be the regulator of this market. I asked Petrobras President Jose Sergio Gabrielli to do this two days ago.

Labao's words come amid a surge in ethanol prices due to an inter-harvest shortage of sugarcane, the raw material used to produce the biofuel. Additionally, a bump in global sugar prices convinced many mills to produce the sweetener instead of ethanol. Like it or not, Petrobras will produce enough of the biofuel to avoid shortages during the inter-harvest season, says Labao.

[Source: Reuters | Image: Agência Brasil – Wikimedia Commons]