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The price of E-85 compared to regular has a slight edge at the Kwik Trip on Milton Ave. near Old Humes Rd.
The price of E-85 compared to regular has a slight edge at the Kwik Trip on Milton Ave. near Old Humes Rd.
The E-85 pump at the Mobil station on Milton Ave. is as lonely as the Maytag repairman since the price of gasoline has dropped well below the price of ethanol.
JANESVILLE — You might think the rapid drop in gas prices would be good news for Manish Dadwal, owner of the Mobile gas station at 1215 Milton Ave., Janesville.
But the drop is hurting him significantly in one area: sale of E85, the blend of 85 percent ethanol and 15 percent gasoline that works in flex-fuel vehicles.
Dadwal’s E85 sales have dropped about 90 percent since the recent drop in gas prices, he said.
Dadwal isn’t the only one feeling the pain. Falling gas prices have put pressure on producers of ethanol to lower their prices, too.
The price of corn, the major input for ethanol, has fallen by more than half in the last five months, but not enough to make ethanol cheaper than gasoline industry-wide.
Last week, ethanol was trading at $1.60 a gallon on the Chicago Board of Trade, while gas was down to $1.11 on the New York Mercantile Exchange.
“They (ethanol producers) are definitely feeling some pain,” said Joshua Morby, executive director of the Wisconsin Bio Industry Alliance. “It certainly makes it tougher to sell ethanol when gas prices are as low as they are right now.”
Ethanol is generally sold in two forms: E85, which only works in flex-fuel vehicles, and E10, the blend of up to 10 percent ethanol that works in all vehicles.
Dadwal’s Mobile station is one of two Janesville stations that sell E85. (The other is Kwik Trip, 3359 Milton Ave.) He was selling E85 for $2.19 a gallon Wednesday and regular gasoline for $1.75.
He’d like to sell E85 cheaper, but he doesn’t sell enough gas to get a license to blend his own, so he’s stuck paying whatever he’s charged, he said.
His E85 business has practically disappeared, he said.
“Some people buy it,” he said. “I don’t know if they’re intentionally buying it or they’re buying it by mistake.”
Some stations have stopped mixing ethanol into their regular gasoline, too. Although some states require stations to mix 10 percent ethanol into their gasoline, Wisconsin isn’t one of them.
Still, some stations don’t have a choice, said Paul Simon, owner of Rollette Oil Co., Janesville. For example, BP won’t sell 100 percent gasoline to its Wisconsin stations, he said.
Stations that aren’t linked to a certain brand of gas, such as Kwik Trip and Woodman’s, have been able to avoid mixing the more expensive ethanol into their regular gasoline, he said.
But consumers should remember price isn’t the only attractive feature of ethanol, Morby said. It’s also a renewable, cleaner-burning fuel created in the Midwest, he said.
Russ Kashian, associate economics professor at UW-Whitewater, believes the discrepancy between gas and ethanol prices is temporary. Eventually, gas prices will rise and ethanol will again be cheaper than gas, he said.
Meanwhile, the ethanol industry can use this time to research new ways of making more efficient fuel from non-food sources, he said.
“Maybe in the long run, it gives them the possibility of moving over to switchgrass (and) cellulose—more sustainable forms of ethanol,” he said.