The growing urgency to accelerate the energy transition has been pressuring governments and policymakers to present effective plans for a sustained long-term decrease in greenhouse gas emissions. In Brazil, some general bills aimed at fossil fuel replacement with sustainable alternative fuels have been proposed by congressmen and by the government [1]. All of them consider ethanol to remain an important component of the Brazilian transition. Therefore, a constant revisitation of the policies' effects is needed to assure market competitiveness and further enhance consumer switching to ethanol. In this context, fuel demand elasticities are an important input for policymakers. Although the subject has been explored in literature [2-5], our work uses a new database with much greater granularity, containing fuel consumption per municipality per month in the 459 municipalities for which retail prices are available. We find own-price elasticities to be 1.2 for gasoline and 1.7 for ethanol, higher than values found in previous research, indicating that Brazilian consumers may be more price-sensitive than previously thought. Cross-price elasticities were positive and significant for both fuels and also higher than previous results.
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