If you haven't noticed lately, wholesale ethanol prices are much higher than wholesale gasoline prices. If you live in one of the many areas where they blend gasoline with up to 10% ethanol, you're paying more for each gallon.
Wholesale gasoline has recently been trading well below $2 per gallon, and as of late, ethanol has been trading over $2 per gallon. If you fill up with E85, you probably noticed that prices are much closer (or higher) than unleaded already. Part of the reason is the fall in ethanol-producing refineries. Many of the companies that own facilities have fallen on hard times as ethanol subsidies end and corn prices rose. This has resulted in companies going bankrupt and has resulted in lower ethanol production, increasing prices.
If you're lucky enough to live in an area that still has unleaded regular that isn't blended with ethanol, you're likely paying as much as 10-cents less per gallon. To see where Ethanol refineries are located (the closer to you, the more likely you pump gas with 10% ethanol), click
However, Valero announced today that they purchased a few ethanol plants and plant to restart them as soon as possible. (READ MORE!) While this will help bring ethanol costs down in the future, it will take some time before ethanol prices go down and supply rises.
Speaking of ethanol, we should all be cautious of new laws some of our representatives are working on. Some "Corn Belt" lawmakers are working on the EPA to grant waivers so that gasoline gets blended with even more (low energy) ethanol. While it might boost the octane rating, it just means that refiners will use even lower rated sub-octane fuel and will result in fewer miles per gallon at a higher price. I encourage you to write your representatives to make sure this does not happen. Forced changes at the pump typically don't go over well (think when politicians capped wholesale prices in Hawaii and it backfired). Generally, forced changes at the pump result in higher prices (think RFG and all the Summer blends of fuel). Speak out!