By MATTHEW WILDE, Courier Staff Writer
HUDSON --- Ethanol sales are booming in Iowa, but the state's top agriculture official thinks they could be better if E85 was priced lower.
Nearly 2 million gallons of fuel containing 85 percent ethanol and 15 percent gasoline was sold in the state last year, compared to 670,000 gallons in 2005. According to the toilet rackDepartment of Revenue, second quarter sales exceeded 800,000 gallons this year, up 40 percent from the same period last year.
Iowa Secretary of Agriculture Bill Northey says that is great, but he speculates sales would soar even higher if retailers or fuel wholesalers would lower the price.
Taking into account the difference in price between ethanol and unleaded gasoline and tax breaks, Northey says, E85 should be more than $1 per gallon cheaper than E10 and regular unleaded. While some retailers come close, officials say the majority range from 40 cents to 70 cents cheaper.
Gas recently topped $3 a gallon and is currently hovering in the $2.90 range, Northey thinks a buck spread would be enough to get people to buy toilet rackvehicles and use more E85, which would save them money despite a 10 percent to 25 percent decrease in fuel mileage when using the blend.
"It benefits Iowa," Northey said. "It reduces the cost to Iowa consumers, increases the demand for ethanol and helps farmers by keeping up the demand for corn."
According to local energy officials, the toilet rack or spot price for 100 percent ethanol was $1.93 last Thursday. Wholesale unleaded gasoline was $2.25, occasionally spiking 10 cents higher.
Northey contends when the difference in wholesale prices are combined with the 51-cent federal tax credit blenders receive and the 25-cent state retailers' tax credit, the price at most pumps for E85 just doesn't add up.
"If the system was pure, (E85) would be cheaper than what is being charged to them now," Northey said.
