Ethanol Is Much More Expensive Than Gasoline

“Now flash forward to today. With the Summer solstice less than 24 hours away, East Coast gasoline suppliers paid $5.75 gal for the ethanol that makes up 10% of finished gasoline blends in markets that demand reformulated gasoline… Part of the difference lies in the reformulated blend stock, which currently costs about 22cts gal more than conventional gasoline. But adding 10% of ethanol at $5.75 gal jacks the finished RFG-ethanol price up by another 36cts gal. Subtract the 5.1cts gal ethanol blender’s credit, and the blame for ethanol’s impact on the finished gasoline falls to “just” 31cts gal.”

Consequently, the government mandate of using 10% ethanol in reformulated fuels has raised the price of gasoline 31 cents in RFG areas. Add together the taxes placed on gasoline (federal, state, local) and additional costs caused by government mandates. Compare that number to an oil company’s profit per gallon and see who is gouging consumers.

2 thoughts on “Ethanol Is Much More Expensive Than Gasoline

  • June 22, 2006 at 4:39 am

    Oil companies have invested in ethanol blending capacity. Historically, ethanol has been cheaper than gasoline, therefore oil companies are very motivated to blend in ethanol and increase profits. Since ethanol has a lot of octane you can refine gasoline to a lower octane (saving money) and blend in ethanol to net correct octane level. Consequently, it has been beneficial for oil companies to use ethanol when blending gasoline. Therefore, I would disagree that oil companies haven’t invested in ethanol.

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