Sunday, May 16, 2021

The Ethanol Gasoline Tax - WSJ

The Ethanol Gasoline Tax - WSJ
  • Gasoline prices hit a six-year high this week amid the Colonial Pipeline shutdown and a rebound in demand as more people hit the road. But one overlooked cause of higher prices at the pump is Congress’s ethanol mandate.
...Refiners are crashing into what’s known as the “blend wall”—i.e., the volume of ethanol that can be sold given existing cars and infrastructure. 
Warranties don’t allow older cars to run on ethanol blends higher than 10% because it can corrode engines. 
Ditto storage tanks and pumps at the gas station. 
...Hence, RINs prices shot up again
Corn prices have skyrocketed 125% in the past year, pushing up ethanol and RINs prices. 
RINs this week were trading at $1.90 per gallon, up from 15 cents in January 2020. 
Our sources estimate the ethanol mandate is adding about 30 cents a gallon to the wholesale cost of gas on average. 
The federal gas tax is 18.4 cents...Read all.

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