Gas stations turn back to selling ethanol blend

Your next tank of gas is more likely to contain ethanol, but you probably won’t be able to tell because area gas stations don’t have to disclose that.

For the first time in months, wholesale gasoline costs more than E-10, the fuel blend that’s 10 percent ethanol and 90 percent gasoline. That has fuel retailers, who typically buy whatever is cheaper, flocking back to E-10.

Wholesale manager F.J. Cronenwett of Robson Oil, an area fuel distributor that sells to stations, said: “Every customer I have is buying E-10 when it’s cheaper.”

In Missouri, the shift also has triggered a state law requiring retailers to sell E-10 for regular and midgrade blends whenever their wholesale price is lower than gasoline’s.

Unlike most states, Missouri and Kansas don’t make retailers disclose when ethanol is being sold. Though E-10 doesn’t harm most vehicles and power equipment such as lawn mowers, it can affect mileage because it has about 3.5 percent less energy than an equivalent amount of gasoline.

“I would really prefer to know,” said one area consumer, Charles Kigar of Overland Park.

But the shift is good news for the ethanol industry, which has struggled in part because it lost its price advantage last fall. Gas prices have risen much faster than ethanol’s recently, giving the advantage back.

“Now that gasoline is priced above ethanol, we’re seeing more discretionary blending,” said analyst Rick Kment of DTN, which follows refined fuels and ethanol.

At area wholesale terminals, E-10 was available in some brands Friday for about 15 cents less than a gallon of gas.

It wasn’t clear whether all Missouri wholesale terminals were selling cheaper E-10, but officials believe that most gasoline now sold in the state is an ethanol blend.

“I’m assuming most of the gasoline has ethanol in it,” said Ron Hayes of the Missouri Division of Weights and Measures. His agency oversees the ethanol mandate law, which took effect in January 2008.

Most fuel sold last year in Kansas contained ethanol, but that slipped as ethanol became more expensive than gas, to the point where ethanol consumption was down 30 percent in March from a year earlier.

Consumers who watch gasoline prices closely like to know when they’re buying E-10, which has to be about a dime a gallon cheaper to make up for its lower energy content. E-10 currently is cheap enough wholesale that, if the price difference is passed along, consumers could come out ahead a few cents per gallon.

The difference in energy content really shows up in E-85 — a blend of 85 percent ethanol and 15 percent gasoline that’s used by “flexfuel” vehicles. The average retail price of E-85 nationwide is $2.16 a gallon, compared with $2.64 for gas. That seemingly makes E-85 by far a better deal. But on an energy-equivalent basis, E-85’s price is actually higher at $2.85 a gallon.

source: kansascity