Tensions in the Middle East are creating volatile oil markets, as the U.S. ethanol industry reminds drivers how biofuels keep gas prices lower.
Oil prices fell on a potential de-escalation between the U.S. and Iran, after reaching a nine-month high this week.
Still, analysts expect gas price increases to reach the pump in the days ahead.
The Renewable Fuels Association says that at fuel terminals where gasoline is blended, ethanol is currently selling for 40-50 cents per gallon less than gasoline.
As U.S. consumers brace for higher prices, a recent study shows the nation’s growing supply of ethanol significantly helps dampen gasoline price shocks that result from sudden oil market disruptions.
The study says that if renewable fuels were removed from the fuel supply, gas prices would be more than $1 per gallon higher.
RFA President and CEO Geoff Coopers says the recent tensions in the Middle East, and the recent study “highlights the critical need for greater domestic energy security and diversity.”
