Wednesday, August 20, 2008

I've rethought what E85 should cost

I just can't get over how cheap E85 should be, according to my spreadsheet. I think that I'm probably underestimating freight.

Just looking at the NYMEX price for unleaded (currently at $2.86 a gallon), adding in the gas tax and the sales tax, to get Meijer's price of $3.85, you need to add 23 cents per gallon. This is the cost of freight, handling, profit, whatever.

If I add that same factor to my E85 calculation, I get $2.68 a gallon.

I found another website that supposedly has rack prices for ethanol in a number of states. For example, it has the rack price in Indiana as $2.52 right now. Using that number, and picking 12 cents per gallon as freight, I get an E85 price of $2.81.

Either way, that's significantly cheaper than the $3.35 that Meijer is currently charging for E85.

1 comment:

Anonymous said...

Buzz- these new numbers are very close for appropriate retails- $2.68 for E85 direct from an ethanol plant and $2.81 for E85 from an oil rack source.