25. Sep 2013
New analysis: Ethanol cutting crude oil, gasoline prices
Consumers are saving 50 cents to $1.50 per gallon on gasoline as a result of increased ethanol production under the renewable fuel standard, according to a new analysis by energy economist Philip K. Verleger, writes the Renewable Fuels Association, 24/9.
“The implication for world consumers is clear. The US renewable fuels program has cut annual consumer expenditures in 2013 between $700 billion and $2.6 trillion,” writes Verleger in a short commentary available on pkverlegerllc.com.
“This translates to consumers paying between $0.50 and $1.50 per gallon less for gasoline.” The commentary summarizes a more detailed analysis that was included in Verleger’s August Petroleum Economics Monthly newsletter.
Crude oil prices would be between $15-$40 per barrel higher today without the substantial volumes of ethanol that have been added to petroleum inventories since enactment of the renewable fuel standard (RFS). According to the commentary, the RFS today has added “…the equivalent of Ecuador’s crude oil output to the world market at a time of extreme tightness.”
Read more at ethanolproducer.com.
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