Ethanol Demand Hits Record, Boosting Farm Demand and Lowering Fuel Costs

Higher ethanol content in gas has helped reduce fuel costs for some drivers, according to economists with the Renewable Fuels Association (RFA). The average ethanol blend rate hit a record 10.58% over the past 12 months, with most gas remaining at E10, which contains 10% ethanol.

The RFA's Chief Economist Scott Richman says stronger ethanol demand could help keep gasoline prices lower while increasing demand for corn and other feed grains. Ethanol is selling for at least $1 per gallon less than gas blendstock at the wholesale level, creating an incentive for greater blending.

Legislation to allow year-round sales of E15 nationwide is still pending in Congress. Supporters say expanding E15 availability could benefit drivers through lower fuel costs, farmers through increased demand for crops, and refiners through greater flexibility in meeting federal fuel requirements.