E85 Holds Price Edge over Traditional Gas

Business News/Analysis, Deliver Dispense, Infrastructure, Marketing/Markets and Sales, Michigan, Ohio

May 23, 2011

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by Jon Chavez (Toledo Blade) The price spread isn’t as much as it was a week ago, but ethanol-blended gasoline in the area is still at least 40 cents a gallon cheaper than regular unleaded gas at one retailer.
Meijer is selling E85, which is made from corn, for $3.29 this week. That’s 12 percent cheaper than unleaded gas the retailer sells for $3.69 a gallon.
However, just over a week ago Meijer was selling E85 for the same price, but unleaded gas sold for $4.09 a gallon, creating an 80-cent price spread. Owners of so-called flex fuel vehicles that can operate on E85 were stocking up on the alterative fuel even though it gets poorer mileage than unleaded gasoline.
“In the last six weeks, our sales of E85 have increased significantly. They’ve almost tripled in some cases depending on the prices and location,” said Frank Guglielmi, a spokesman for Meijer, in Grand Rapids, Mich.
…“If some retailers aren’t passing that spread through it may be that the E85 they have in their tank might have cost more when at the time they bought it from the wholesaler,” Mr. Spofforth said. “We have also heard that there are some fuel distributors that are not passing on the lower cost of ethanol to the retailers. And some ethanol plants not passing on the reduced costs.” READ MORE

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