Mar 20 • 22:19 UTC 🇦🇷 Argentina La Nacion (ES)

With more bioethanol, the oil shock can be mitigated

Argentina could benefit from increasing bioethanol usage in gasoline to mitigate the adverse effects of rising oil prices amid geopolitical tensions.

In Argentina, unlike Brazil, there is a much lower mandate for bioethanol blending in fuels, which limits its potential benefits amid rising international oil prices. The ongoing conflict in the Middle East has caused a spike in Brent crude oil prices, underscoring the vulnerability of economies reliant on fossil fuels like Argentina. This price instability can lead to significant increases in domestic inflation, further stressing the Argentinian economy.

Expanding bioethanol use could positively impact various economic factors including inflation, the trade balance, industrial employment, regional development, mobility, and environmental sustainability. The recent escalation of conflict in the region highlights the risks associated with reliance on oil imports, as disruptions in supply can lead to rapid rises in fuel prices and financial strain on households and businesses in Argentina.

To mitigate these effects, the article suggests that adopting a more aggressive bioethanol blending mandate could serve as a buffer against external shocks and stabilize the domestic economy. This would not only help counter the rising costs associated with fossil fuels but also contribute to a more sustainable economic model that reduces dependency on volatile global oil markets.

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