Ethanol Prices going upThe oil companies will no longer receive a $.45 per gallon federal tax credit is no longer in place, as a result prices will go up.

Typically when we hear these words, we naturally think of the ethanol producer and the  reduced number of sales of the product.

But now, with the tax credit gone, consumers will also feel the pinch. Without the credit, prices will trend upward as oil producers will not be receiving the blending credits and will have to raise prices for ethanol blended gasoline products.

In addition, oil prices soared on Tuesday. Source Washington Post – January 2, 2012

  • Benchmark crude rose $4.13 to finish at $102.96 per barrel.
  • Gasoline rose 9.12 cents to end at $2.7486 per gallon.
  • Heating oil rose 12.4 cents to finish at $3.0382 per gallon.
  • Natural gas rose 0.4 cent to end at $2.9930 per 1,000 cubic feet.

A number of factors will contribute to price increases at the pump in 2012 and it would be nice if this issue is taken up soon to help control all of the factors that are affecting price. If a number of factors occurred all at once in your business and they affected your price and bottom-line, you would address the issues right away and find away to satisfy your clients and be profitable at the same time.  My hope is the government recognizes this issue soon and takes steps to control the prices from going too high, too fast.

Picture via cote

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