Effect of Fuel Quality Monitoring and Inspection on the Quality of Brazilian Fuel

This article estimates the effect of fuel quality monitoring and the inspection programs performed by the Brazilian National Agency of Petroleum (Agência Nacional do Petróleo - ANP) on the quality of fuel sold in Brazil. The research mainly uses microdata extracted from the Fuel Quality Monitoring Program (FQMP), which has characteristics of a random experiment, and also the Inspection Program, a typical example of command-and-control regulation. It is verified through an instrumental-variable estimation that monitoring and inspection activities employed by the ANP effectively reduce the likelihood that gas stations will commercialize non-compliance fuels. The results prove that either traditional or alternative deterrent methods can improve the engagement of economic agents concerning fuel quality, increasing the probability that a gas station sells fuels with less polluting potential.