Tuesday, May 6, 2008

E85 Price: Getting Gouged

In response to my post regarding E85 price fixing, one anonymous person shed more light on the price to produce and transfer E85, in order to better determine if gas stations are price gouging on E85.

Here is the new equation:
(Current Ethanol Price - $0.51 Blender Credit) X 0.85
+ (Current Unleaded Price X 0.15)
+ 0.184 Federal Tax
+ 0.20 Michigan Tax
+ 0.03 Estimated Freight Charge per Gallon
= Cost to Gas Station

Let's run these numbers with the current price of ethanol (05/06/2008):
[($2.45 - $0.51) X 0.85] + ($3.65 X 0.15) + $0.184 + $0.20 + $0.03 = $2.612 per gallon E85

Anything above $2.612 per gallon for E85 is profit for a Michigan gas station. Do you think Meijer and other gas stations are gouging for E85?

3 comments:

Buzzcut said...

I think that we're getting gouged, dude.

I paid $3.30 for E85 today! I would be a lot happier at $2.60.

Josh said...

Hey buzzcut -

I would be a lot happier at $2.60 per gallon too, but at the current price of gasoline and ethanol, that would be below cost for them.

I did see that Meijer was charging $0.50 less this weekend. Regular was at $3.86, and E85 was at $3.36 - which is better.

Anonymous said...

What are you guys paying for E85 today? E85 here just went to $2.83 and gas to $3.99.

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