Domestic Fuel

The Brazilian ethanol industry’s planned promotional event in Washington D.C. has been abruptly canceled, according to a news release.

One week after approving the event and less than 24 hours after allowing promotional banners to be hung on its property, Capitol Petroleum Group canceled plans by the Brazilian Sugarcane Industry Association (UNICA) to offer Washington-area residents a discount of 54 cents per gallon on gasoline purchased at two Exxon stations on Capitol Hill. A company representative, citing unspecified “political” reasons, abruptly ended UNICA’s plans to help DC drivers keep a little extra money in their pockets for the upcoming Memorial Day weekend.

“Open market competition and free speech are two fundamental principles that have made the United States a global leader,” observed Joel Velasco, UNICA’s chief representative in North America. “It’s a shame that those values don’t seem to apply in this situation.”

The promotion was being sponsored by UNICA to highlight the current 54-cent-per-gallon tariff on imported ethanol and educated drivers about the benefits of sugarcane ethanol.

The Brazilian Sugarcane Industry Association (UNICA) is discounting gasoline by 54 cents per gallon on the Tuesday before Memorial Day at two Capitol Hill gas stations to draw attention to a 54 cents per gallon tariff on imported ethanol.

“The one-day discount will provide Washington area residents with a preview of how Americans across the country could save money at the pump if Congress ends this unfair import tax later this year,” reads the UNICA release on the promotion.

The promotion is not sitting well with ethanol organization Growth Energy. “The only thing we should be importing from Brazil is their resolve to become energy independent,” said CEO Tom Buis. “Domestic ethanol is cheaper than imported ethanol, and it is far cheaper than gasoline refined from imported oil. The truth is that we have to end our reliance on foreign energy – period. Domestic ethanol helps create U.S. jobs, and helps the U.S. economy, and strengthens our national security by reducing our dependence on foreign energy.”

The 54 cent per gallon secondary tariff on ethanol is tied to the 45-cent blender’s credit to encourage blenders to use domestically produced ethanol. The secondary tariff on ethanol imports ensures that the tax credit is not given to the ethanol produced in another country. All ethanol blended with gasoline in the U.S. qualifies for the blenders’ credit, no matter the country of origin of the fuel ethanol. To avoid the use of taxpayer dollars to support foreign ethanol production, U.S. ethanol imports from non-Caribbean Basin countries are subject to the secondary tariff.