E85 PRICE GOUGING
A recent report from the Renewable Fuels Association indicates there’s likely price gouging on E85 in the St. Louis market area. What’s the price of E85 near you? Illinois Corn is rolling out a new website where you can report E85 prices wherever you fill up. The goal is to provide transparency so that consumers like you know when you’re getting a good deal…and when you’re not. Check it out and sign up to participate at www.lowerpricedgas.com.
Ethanol has been running anywhere from $0.60 to $1.00 cheaper than gasoline at wholesale levels. That should equate to E85 being substantially less expensive than regular gasoline, as well. We know that’s not the case everywhere.
A new RFA case study suggests that E85 retailers in the St. Louis area may be purposely price-gouging drivers. RFA found that the wholesale-to-retail markup for E85 was nearly double the markup for E10 prices, and discovered that retail prices for the E85 were about $1 per gallon higher than levels justified. The study deduced that “some gasoline producers/suppliers and their franchised retailers purposely employ E85 pricing strategies meant to discourage E85 consumption and negatively influence consumer perceptions about the fuel.”
RFA made more than 250 observations at all nine retail stations selling E85 in the St. Louis metro area — all of which are branded by one of the Big Five oil companies — during the summer. The average E10 retail price was $3.452 per gallon and the average E85 retail price was $3.476 per gallon. Based on prices for locally available ethanol, hydrocarbon blendstock, RFS RIN credits, and a typical markup, E85 could have been offered at retail for $2.44–2.55 per gallon.