Biodiesel and Ethanol

Ethanol Spike Causing Rising Gasoline Prices

April 04, 2014

Photo via fishhawk/Flickr.
Photo via fishhawk/Flickr.

A volatile ethanol market has been driving gasoline prices higher since early February because most gasoline sold in the U.S. has about 10% of the corn-based biofuel, reports MarketWatch.

So far this year, the price of the ethanol additive has surged 30% to $2.30 per gallon. In March, ethanol prices rose 22%, according to the outlet. In recent years, the corn-based fuel has been cheaper than gasoline hydrocarbon, making it an appealing blending option to lower prices.

The national average price of gasoline rose to $3.57 for the week ending March 31, according to data from the U.S. Energy Information Administration. Among the 50 states, 29 recorded an average price of at least $3.50 at the end of March, according to the AAA's Daily Fuel Gauge Report.

The shorter supply of ethanol is mostly due to transportation disruptions due to harsh weather, energy pundits told MarketWatch.

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