Savings at the Pump
The three remaining presidential candidates are arguing this week about how to give Americans price relief at the gas pump.
So it is worth noting that new research from Iowa State University has found that ethanol production has caused retail gasoline prices to be $0.29 to $0.40 per gallon lower than would otherwise be the case.
Those findings echo the assessment of Merrill Lynch commodity strategist Francisco Blanch, who says oil and gasoline prices would be about 15 percent higher if biofuel producers weren’t increasing their output.
Either way, it’s money you can take to the bank.
Sources:
“The Impact of Ethanol Production on U.S. and Regional Gasoline Prices and on the Profitability of the U.S. Oil Refinery Industry,” by Xiaodong Du and Dermot J. Hayes; Iowa State University, Center for Agricultural and Rural Development; Working Paper 08-WP 467, April 2008.
“As Biofuels Catch On, Next Task Is to Deal With Environmental, Economic Impact,” by Patrick Barta, Wall Street Journal, March 24, 2008.
