Car owners in this giant city of 11 million people are giving the oil
companies fits. Ethanol outsells gasoline here by a large margin. This year, it
became the most popular fuel throughout Brazil.
Petróleos Brasileiro SA, or Petróbras, is trying to hold on to its customers.
The Brazilian national oil company has held gasoline price increases to just 10
percent in the last three years. Other gasoline retailers, from ExxonMobil to
Shell, have held back as well.
"Competition from ethanol is stiff," said Almir Guilhereme Barbassa, Petróbras'
chief financial officer. "In the long run, we have to consider ethanol is going
to be more and more competitive, so we have to be prepared to sell our gasoline
to international markets."
Even with the competition, fuel isn't cheap in São Paulo. Taxes are high. After
converting from Brazilian reais to dollars and liters to gallons, regular
gasoline goes for about ...