Wednesday, June 18, 2008

Are we being gouged on E85? I don't think so!

Okay, I just made a new spreadsheet that calculates the price that E85 "should" be.

The spreadsheet goes out to the CBOT and Nymex websites and gets the price of ethanol and unleaded from yesterday. It takes 85% of the price of ethanol, 15% of the unleaded price, adds the gas tax (51 cents in Indiana) and a 3 cent freight charge.

It's telling me that E85 should be $3.54 a gallon.

Point of fact, it is $3.52 a gallon right now at Meijer. And E85 is NOT 85% ethanol right now, so it should even be a little more expensive.

Now I have the spreadsheet, I need how to make a widget that refers to it.


Anonymous said...

Buzz- I just did a quick "back of the envelope" calculation based on $2.88 CBOT ethanol and $3.33 rack clear NL and came up with $3.254 including 20 cents retailer margin.
Did you deduct the 51 cent blender credit on the ethanol portion?

CBOT ethanol is up about 45 cents over the last few days but Chicago spots at $2.85 are not getting many buyers as rail is still experiencing difficulties on delivery- it will be interesting to see how this market shakes out.
3rd quarter contracts are also high but not doing many trades from what I hear. Much of the ethanol being sold today was forward contracted in the $2-$2.30 range. Oil company truck load racks are wildly varied right now with postings in WI from $2.69-$3.05 before the 51 cent credit is deducted.


Chris Hedges said...

Is Family Express losing money at $2.99/gal for E85 or are they passing along the savings for having bought fuel at a lower price earlier in the year?

Gas City at Sheffield Road in Dyer is up to $3.81/gal this evening!

buzzcut said...

I wouldn't be surprised if E85 is a "loss leader" for Family Express.

They certainly aren't making money on it.

Meijer was at $3.73 a gallon this weekend.