If you?ve travelled anywhere within the last week or visited the gas station anytime soon you probably have noticed that gas prices have rapidly gone up, and the money in your wallet has rapidly gone down. While the almost daily rise in prices is affecting consumer?s every day, what does this mean for the agricultural industry? The biofuel industry says the record gas prices are fueling interest in blending more higher blends of ethanol.
Geoff Cooper, Renewable Fuels Association President and CEO talks about the direct impact on the blending of corn ethanol due to near-weekly records in gas prices.
?We’re seeing unprecedented interest in the wholesale market and blending sector in E15?we’re seeing E85 sales really taking off in certain parts of the country. And that’s because ethanol, you know, as recently as yesterday was selling for a dollar and 30 cents a gallon, less than gasoline.?
Cooper says with rising gas prices, he?s not sure how much more consumers are willing to take before hitting those breaks and slow down their driving. He also notes that it wouldn?t surprise him if the average gas price hit five dollars a gallon by mid-summer, based on the pure gasoline prices in the future.
?Yeah. And that’s absolutely a concern and a risk. We’ve seen that many times in the past. Surprisingly $4 gasoline has so far not led to this sort of demand destruction that we have experienced in the past. At some point you’re right, you hit a breaking point where consumers really put the brakes on and stop driving so much.?
Cooper isn?t sure when the fuel market will go ?south? and at what price. But he says at some point, those record prices will have an impact on our drivers, and they will start to buy less gas-and with that, less ethanol.
