RFA study shows ethanol kept fuel prices lower during Iran war
In Washington, blending ethanol into the nation’s fuel supply has helped to substantially lower gasoline prices during the ongoing Iran conflict, a new study for the Renewable Fuels Association shows. Prepared by George Hoekstra, a 35-year veteran of the petroleum refining industry, the study concludes that the average E10 cost savings advantage has been 38 cents per gallon since the Iran conflict began.
The Hoekstra report shows that E15’s economic benefit during the Iran conflict has been even greater, offering a lower cost of 57 cents per gallon. The study looks at three economically distinct sources of ethanol value: The value of replacing gasoline volume with lower-cost ethanol, the octane value of ethanol, and the value of Renewable Fuel Standard compliance credits called RINs. However, even when one leaves out the impact of RFS blending obligations and RINs, E10 still offered a 17.5 cents per gallon cost advantage compared to regular gasoline, showing that ethanol has substantial economic value even before counting the RIN credit value. Hoekstra also estimates that for the full year through early August, the non-RIN portion equated to overall savings of $18.7 billion.
Category: Fuels
