Chile Weighs Ethanol-Gasoline Blend Amid Soaring Oil Prices
Chile is considering adopting ethanol-blended gasoline due to rising oil prices and strained government finances, according to documents seen by Reuters. The energy ministry has drafted a proposal to shift to E10 ethanol blending, mixing 10% ethanol with gasoline, which could reduce government fuel supply costs by approximately $107 million annually.
The country imports 181,000 barrels per day of crude oil, and oil prices have soared during the U.S.-Israeli war on Iran, with Brent trading at over $105 a barrel. Chile relies heavily on MTBE, an octane-boosting gasoline additive, but lacks significant domestic production to support a domestic ethanol industry.
A switch to E10 would help phase out MTBE and ease pressure on President Jose Antonio Kast's administration following oil supply disruptions, which have stoked public discontent. The transition could be introduced gradually and partly offset by lower carbon-tax payments, with state oil company ENAP investing about $10.8 million to adapt refining, terminal, and storage infrastructure.