Oil prices, not ethanol, to blame for recent spike in gas prices

Well, that didn’t take long. Gas prices have increased in recent weeks and the usual crowd isn’t wasting any time pointing the finger at ethanol.

Trilby Lundberg conducts the Lundberg survey of about 2,500 gas stations every couple of weeks. She says an increase in the price of ethanol (which is blended with gasoline) due to what’s happening in Ukraine has caused gas prices to go up.

Trilby Lundberg, who conducts the survey, said recent increases in ethanol prices affected pump prices because ethanol is blended into gasoline. She said the uncertainty over Ukraine’s future also factors into this because “Ukraine is a major corn exporter and nearly all ethanol in the United States is made from corn.”

What the survey and linked story fail to point out is that wholesale ethanol is still less expensive than gasoline. Yes, the cost of ethanol has gone up in recent weeks, and blenders are likely increasing prices accordingly, but without ethanol-blended fuel, gas prices would actually be higher than what they currently are.

If you check out the “What clients say” section of the Lundberg Survey website, most of their clients appear to be in the oil industry.

The real reason we’re paying more at the pump in recent weeks? Oil prices. The cost of a barrel of oil is up since the beginning of the year. That’s where we should be pointing fingers, not at ethanol.

(Hat tip to the Missouri Corn Growers Association for alerting us to this story.)