NPRA Responds to Comments by the Ethanol Industry on Gasoline
2006-04-18 16:25 (New York)
Prices
WASHINGTON--(BUSINESS WIRE)--April 18, 2006
NPRA, the National Petrochemical & Refiners Association,
today issued the following response to statements made by the ethanol
industry on gasoline prices:
NPRA President Bob Slaughter said: "The unit price of ethanol is
only part of the puzzle when it comes to determining the impact of an
ethanol mandate on gasoline prices. First, because of ethanol's
physical properties, such as volatility, increasing ethanol use
requires making substantial changes in the feedstocks with which the
ethanol is blended. These feedstock changes diminish supply. On the
other side of the ledger, removing MTBE takes away a clean source of
octane and sacrifices significant volume and octane. These factors and
the impact of the new ethanol mandate combine to create a bull market
for ethanol, the price of which in New York Harbor has increased from
the $1.45 range this time last year to $2.00 in December and $2.77
currently.
"Because of this rapid increase in ethanol prices, refiners must
buy high-priced ethanol to include in reformulated gasoline as well as
record-priced crude oil. Other complications with the use of ethanol,
such as the inability to use pipelines, place further stress on
gasoline price and supply. Experts in the field, like the DOE's Energy
Information Administration, have suggested that transition to ethanol
in the near-term will not be of any help to consumers. But as always,
refiners will continue to do their best to meet consumers'
expectations, even under difficult circumstances."
NPRA is a national trade association with more than 450 members,
including most U.S. refiners and petrochemical manufacturers.
