Why is E85 Almost $2 Cheaper Than Other Blends of Gasoline?

The average price for gas sits at $5 nationwide, according to AAA. With drivers searching for the cheapest prices, gasoline with higher blends of ethanol is seeing an uptick in demand.

E85 is priced significantly less than other blends of fuel across the country, even $2 below at some locations.

“We’re talking about a 30% to 40% discount in many cases,” says Geoff Cooper of Renewable Fuels Association (RFA). “The reason for that is because the main ingredient in E85 –  ethanol – is priced far below gasoline right now. You look at the wholesale terminals where the fuel is blended and ethanol today is selling for about $2.80 a gallon. That compares to gasoline that is selling for about $4.20 a gallon. So you have a $1.40 per gallon savings at the terminal where these fuels are being blended.”

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