Brazil president to reduce ethanol mix to fight inflation

Brazil's President Dilma Rousseff has decided to reduce the amount of ethanol mixed into domestic gasoline as part of her efforts to combat inflation, a government source told Reuters on Monday.

Rising prices for sugar -- and therefore for sugar cane-derived ethanol -- have been a major factor in pushing inflation above Brazil's official target range.

At present, anhydrous ethanol is blended into local fuel at a ratio of 25 percent. Rousseff is still evaluating whether to lower the mix to 18 percent or 20 percent, with a decision likely by August, the source said on condition of anonymity to discuss internal policy decisions.