Consumer Benefits


As detailed in this website, there are many benefits to producing and consuming ethanol. We benefit from the cleaner air as a result of lower greenhouse gas emissions, the jobs created by the ethanol industry and its subsequent benefits to our economy and the fact that it has reduced our dependence on foreign oil.

But ethanol has also benefited consumers by reducing prices at the pump. This is because ethanol is cheaper than gasoline and since nearly all gasoline sold today contains 10% ethanol, we pay a lower price at the pump.

Consumers who use fuels with higher blends of ethanol pay less than the price of regular E10. For example, E15 is priced between 5 and 10 cents cheaper than E10 while E85 is priced up to 80 cents less than E10.

On top of this, ethanol also helps keep global crude oil prices in check.

In a study published in 2019, economist and energy specialist, Philip K. Verleger said the blending of approximately one million barrels per day of ethanol into transportation fuel in the US from 2015 to 2018 lowered the average price of crude oil by $6 per barrel during that period. This in turn, reduced retail gas prices by 22 cents per gallon "from the level that would have obtained absent the presence of ethanol in the motor gasoline supply."

These savings, the study said, translates to putting $90 billion back into the pockets of US consumers annually during that four-year period. 

"Allowing for multiplier effects, one can conclude that the use of renewable fuels has raised the US GDP by 0.5% in each of the last four years relative to the level that would have been observed had the RFS program not required the blending of ethanol into gasoline," Verleger said. 

In the same study, Verleger said if the RFS was ended and a million barrels of ethanol were no longer blended into the nation's transportation fuel, oil prices would spike and retail gas prices would be above $4 per gallon. 

In addition, due to its high octane rating of 113 and cheap price positioning, refineries have been able to reap significant cost savings. Without these cost savings, finished gasoline would be priced 3.7 cents per gallon higher.

This is because ethanol has been used by refiners as a cheap source of octane in comparison to other octane blendstocks (blending 10% ethanol into gasoline increases the octane rating by two to five points, depending on the octane rating of the gasoline blendstock). Most states require a minimum octane rating of 87 but and thanks to the availablity of ethanol and its cheaper price point, refineries produce conventional blendstock for oygenate blending (CBOB) at a lower octane, thus reducing costs, and blend it with ethanol to meet the 87 octane requirement.