August 16, 2022
Fargo, US 78 F

Study finds ethanol reduces gas prices

America’s use of ethanol reduced wholesale gasoline prices by an average of $1.09 per gallon in 2001, according to updated research conducted by economists at the University of Wisconsin and Iowa State University. In research sponsored by the Renewable Fuels Association, the 2011 results show a $0.20 per gallon greater price reduction than the $0.89 per gallon impact in 2010.

Dermot Hayes of Iowa State says the study also found gasoline prices have been reduced by an average of $0.29 per gallon nationally, or about 17 percent, from 2000 to 2011 thanks to the use of ethanol.

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According to the research, the gasoline price reduction in the Midwest was even greater, $0.45 per gallon. Bob Dinneen, President and CEO of the Renewable Fuels Association, says the study clearly underscores that the current pain at the pump would be far worse without ethanol. And he says corn producers have stepped up to the plate to meet growing demand.

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Based on government data, U.S. households consumed an average of 1,124 gallons of gasoline in 2001. The study says that means ethanol reduced the average American household’s spending on gasoline by more than $1,200.

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