There has been considerable discussion lately regarding the reasons for rising gasoline prices in the late winter and early spring of 2019, including the potential role of ethanol following the Midwest floods in March. However, according to an analysis released today by the Renewable Fuels Association, the recent increase in gasoline prices is driven by:
- A surge in crude oil prices since the start of the year;
- Typical seasonal patterns in gasoline pricing, partially reflecting the changeover to summer specifications; and
- Refinery maintenance and unplanned outages.
Ethanol prices are at a steep discount to gasoline prices (and to other sources of octane), and inventories have recently been at record levels. While transportation challenges caused issues with delivery to isolated locations in the immediate aftermath of the floods, production was not significantly affected. In the vast majority of the country, ethanol has been helping to hold down gasoline prices for consumers. Read the full analysis here.