Alto Ingredients Inc (ALTO)

[cartonet]

Gas vs. Ethanol pricing:

http://www.gasbuddy.com/gb_gastemperaturemap.aspx

The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel.[1][2] On average, as of April 2014, state and local taxes add 31.5 cents to gasoline and 31.0 cents to diesel, for a total US average fuel tax of 49.9 cents per gallon for gas and 55.4 cents per gallon for diesel.[3]

So I take from the above:

1) Price of gas where PEIX plants are is anywhere from 2.50 to 2.30 (3 to 2.80 less 50c).I was previously watching the futures front end month as reference.Can I just scrap that?

2) With last prices seen for NorCal Ethanol at 2.20 as per http://www.dtnprogressivefarmer.com/dtnag/common/link.do;jsessionid=8777CD4A85E87AEFE40A53762492F732.agfreejvm2?symbolicName=/ag/blogs/template1&blogHandle=ethanol&blogEntryId=8a82c0bc49f2d3d3014a3fde412702d2 , Ethanol PEIX is selling would be stlightly cheaper than gas (10 to 30c).

Did I get the above right?

Now, from Chen Lin comments on Nov 6 newsletter:

A lot of shorts will try to scare you that because oil price dropped, ethanol has to follow. Not true. Ethanol is still trading at 25-30 discount to gasoline while I believe ethanol can trade at 50c premium. Why? Ethanol can increase the octane number. If you mix 10% ethanol with 85 gasoline, it will become 87. Usually gas station sell higher octane at 10-20c more. Even you believe it only worth 5c more, ethanol can be trading 50c premium to gasoline easily. For ethanol price to have significant impact oil price has to reach 50-60 dollar I believe.

This would seem to lead support for PEIX to be able to sell its ethanol much higher to 2.80 - 3.00 shall a squeeze come (+50c on gas in its area).

But then I dont understand the reference to 85 and 87 and gas with ethanol as able to be sold higher. Doesnt ALL gas sold in U.S. have a 10% ethanol blend on it so its all the same octane number?