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Monday, March 11, 2013

Ethanol law could lead to rise in gasoline prices.

The cost of complying with a federal law to use corn ethanol in fuel has sky rocketed. The problem is that refiners are hitting the "blend wall," whereby, according to recommendations from car makers, ethanol shouldn't comprise more than 10% of gasoline. That could conflict with proposed increased EPA quotas for ethanol next year, which has caused the price of ethanol credits to jump to over $1 from just a few cents last year. Eventually, refiners will pass the costs onto consumers, says Valero Energy (VLO).

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