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E85 IS PRICED NEALY $2 LESS PER GALLON THAN REGULAR, HERE'S WHY
Jun. 20, 2022
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| Southeast Iowa |
by Tyne Morgan, AgWeb.com
The average price for gas sits at $5 nationwide, according to AAA. With drivers searching for the cheapest prices, gasoline with higher blends of ethanol is seeing an uptick in demand.
E85 is priced significantly less than other blends of fuel across the country, even $2 below at some locations.
"We're talking about a 30% to 40% discount in many cases," says Geoff Cooper of Renewable Fuels Association (RFA). "The reason for that is because the main ingredient in E85 - ethanol - is priced far below gasoline right now. You look at the wholesale terminals where the fuel is blended and ethanol today is selling for about $2.80 a gallon. That compares to gasoline that is selling for about $4.20 a gallon. So you have a $1.40 per gallon savings at the terminal where these fuels are being blended."
In addition, Cooper says, the Renewable Identification Number (RIN), which is a compliance credit within the Renewable Fuels Standard (RFS), is also valued higher.
"So, every gallon of ethanol that gets blended comes with an RFS credit that is today worth about $1.50 a gallon," he says. "Some marketers and blenders are passing along some or much of the value of those RIN credits to consumers in the form of these lower prices. So that's why we're seeing E85. priced well below E10. In some places, we're seeing E85 still priced at $2.75 or $2.90 a gallon, which is really getting people's attention when they drive by and see a price under $3 on a marquee."
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