The Argentine government Friday said it has raised the ethanol blending mandate in gasoline to 12% from 10% with immediate effect, according to a decree published in the Official Bulletin, the government's newspaper of record.
In February, President Mauricio Macri vowed to boost the blend to help the sugarcane sector contend with low domestic and global sugar prices due to a supply glut. With the higher blend, the industry can use more sugarcane to make ethanol, which fetches a higher price, the government said.
In the decree, the government added that ethanol supplies for the blend are to come equally from the corn and sugarcane sectors.
Argentina last increased the blend to 10% in December 2014 from 8.5% in September of that year and an average of 6% in 2013.
Argentina has a large farming industry with ample acreage to expand corn and sugarcane acreage. While it is a small cane producer on a global scale, for corn it is the world's fourth-largest producer and second-largest exporter.
Ethanol production rose 21.5% on the year to 815,407 mt in 2015, while consumption increased 21.2% to 803,640 mt, according to the latest Energy Ministry data.
The biggest oil refiners in the country are state-run YPF followed by Bridas' Axion Energy, Shell, Oil Combustibles and Petrobras.
