Chile Weighs E10 Ethanol Blend to Cut Fuel Costs and Reduce Oil Price Exposure

Chile is considering introducing an E10 ethanol blend to lower fuel costs and reduce its exposure to volatile international crude oil prices. The proposal involves adding 10% ethanol to gasoline, which would make up 90% of the blend.

The government estimates that this move could save around $107 million in annual fuel supply costs. Chile imports a significant amount of crude oil, with OPEC data showing it imported approximately 181,000 barrels per day in 2022. The recent increase in global crude prices has added pressure to its fuel supply system.

The proposed E10 blend would also reduce Chile's reliance on methyl tert-butyl ether (MTBE), an additive used to increase gasoline octane levels. Ethanol can perform a similar role as MTBE, making it a suitable alternative.

Introducing E10 would require changes to Chile's fuel infrastructure, with state-owned energy company ENAP needing to invest around $10.8 million to modify its refineries, terminals, and storage facilities for handling ethanol-blended gasoline.