Report says increased ethanol mandates will drive gas prices up as much as $1 per gallon

In Washington, oil industry think tank The Energy Policy Research Foundation has published a report warning against the consequences of increasing ethanol blending above E10 levels. The report, which can be downloaded here said that increasing mandated levels of ethan ol in the fuel supply could increase gasoline and diesel prices up by 10-25 cents per gallons by 2012, compared to a scenario which did not include ethanol mandates.

The report said that if gasoline demand had continued to increase and wholesale prices remained over $3.00 per gallon, increasing ethanol volumes could be absorbed into the fuel supply without a major impact on price. However, the report warned that lower utilization rates at US refineries and increases in ethanol prices could bring the added cost of ethanol to $1.00 pr more per gallon.

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