Forecasting fuel ethanol consumption in Brazil by time series models: 2006-2012

Sergio Rangel Figueira, Heloisa Lee Burnquist and Mirian Rumenos Piedade Bacchi

Applied Economics, 2010, vol. 42, issue 7, 865-874

Abstract: This article analysed scenarios for Brazilian consumption of ethanol for the period 2006 to 2012. The results show that if the country's GDP sustains a 4.6% a year growth, domestic consumption of fuel ethanol could increase to 25.16 billion liters in this period, which is a volume relatively close to the forecasted gasoline consumption of 31 billion liters. At a lower GDP growth of 1.22% a year, gasoline consumption would be reduced and domestic ethanol consumption in Brazil would be no higher than 18.32 billion liters. Contrary to the current situation, forecasts indicated that hydrated ethanol consumption could become much higher than anhydrous consumption in Brazil. The former is being consumed in cars moved exclusively by ethanol and flex-fuel cars, successfully introduced in the country at 2003. Flex cars allow Brazilian consumers to choose between gasoline and hydrated ethanol and immediately switch to whichever fuel presents the most favourable relative price.

Date: 2010
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DOI: 10.1080/00036840701720978

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