Are you a fuel smartie? Which money-saving fuel did you buy, and when?

November 20, 2013 |

Fuel-smartieIf you were buying higher blends of renewable fuels this year, you saved on dollars per mile.

So many blends, so many fuels, and a commodity price roller-coaster to navigate. Who’s the biggest fuel smartie? We look at the price data to map the trends.

Times are hard and nobody ought to be spending any dollars at the pump that can be saved by buying smart.

Last January, if you saw ethanol options at the pump and instead opted for standard 87-octane unleaded, you were a fuel smartie. But any other month of the year, the smart choice was dialing in some ethanol.

If by doing so, you thought you could make a contribution to cleaner air for yourself and your kids, you did. Contribute towards energy security? Yep. Helped preserve domestic jobs? Give yourself a pat on the back.

But you also saved hard-earned dollars, compared to people in your neighborhood who opted, any month since February, to go with straight 87-octane unleaded.

That’s the news, based on the data on real-world prices for E85 and other ethanol blends, provided by those estimate altfuels pricing gurus at E85prices.com, which has been crowd-souring the data for years. They track the month-to-month prices for E85 and other blends at a cornucopia of outlets, with a dozen price updates or more each weekday.

fuel-smartie-chart

Comparing ethanol and gasoline mileage: beware

Now, if the spread between E85 prices and standard unleaded averages 57 cents per gallon, as it does right now, that doesn’t necessarily translate into savings-per-mile. For those less familiar with ethanol economics, ethanol generates fewer miles per gallon than gasoline. The spread between E85 and standard unleaded is around 19 percent, according to data from the Alternative Fuel Data Center, which writes:

“1 gallon of E85 has 73% to 83% of the energy of one gallon of gasoline (variation due to ethanol content in E85).”

Now, keep in mind that standard unleaded these days means, generally speaking, E10 — that’s why the differential clocks in at 19 percent for 73 percent ethanol blends (which is what “E85” actually checks in at, on average, based on a survey of nine fuel terminals that the Iowa Renewable Fuels Association recently conducted.)

Now, before you get too much range anxiety — keep in mind that ethanol, while delivering fewer miles per gallon than diesel or straight gasoline, delivers more range per tank than methanol, liquid propane, liquid natural gas, compressed natural gas, and more range than standard plug-in electrics get off the current generation of batteries.

Putting it all together, in each month since February, at least one standard high ethanol blend has been priced at parity with, or at a discount to, standard 87-octane unleaded. In seven months this year, two or more blends were pricing below unleaded — and in November, five of the seven standard high ethanol blends represented the smarter choice.

E85? Not always the Fuel Smartie choice at the pump – despite low, low wholesale prices

Interestingly, the most popular fuel brand for higher ethanol blends, E85, has had a spottier record than most other blends, in terms of price per driving mile. Only in July and August did E85 prices reach parity or better with unleaded.

We’ve been somewhat mystified by the mark-ups on E85.

For comparison purposes, at the moment, wholesale gasoline runs $2.62 and retail is at $3.22 on average — a $0.60 per gallon spread, or a 22.9 percent markup to allow for taxes and the retailer’s margin.

How does E85 stack up? Spreads have been all over the map. In fact, wholesale E85 is available for as little as $1.69 per gallon at The Andersons’ terminal in Denison, Iowa. But the average E85 price in Iowa is running at $2.53 right now in the Hawkeye State. That’s a spread of $0.84 per gallon, or a 49.7 percent markup for taxes and the retailer margin.

By comparison, E30 ethanol blends have been at parity or better compared to unleaded in eight of the past 12 months, and six of the last seven. E20 ethanol blends have been at parity or better in seven of the past 10 months.

The overall winner – the smartest fuel choice all year?

E30 ethanol blends have been the big performer all year. Over the past 12 months, it has been priced at better than parity with unleaded gasoline and every other major ethanol blend — and in the past 3 months, has been checking in at a whopping 10 percent discount to unleaded, compared to its 6 percent parity threshold.

Now, for most drivers, the savings add up slowly, and are unlikely to cause drivers to be scattering all over town looking for ethanol bargains. And prices will vary from pump to pump, city to city, region to region.

But it’s a money-saver — and why pay more?

E85 fuel sales taking off

Seems like word has been getting around about E85 and its brethren. In Iowa, the Iowa Renewable Fuels Association is reporting a 43 percent jump in E85 sales in the second quater, compared to Q1. But that pales compared to the figures out of Minnesota — the home of more E85 pumps than any other state, with 349, or more than 10 percent of the national total.

In Q2, E85 sales in Minnesota jumped a whopping 82 percent over Q1. A one-time fluke? Hardly. Sales jumped another 32 percent between Q2 and Q3.

The Bottom Line

If you were buying ethanol blends this year instead of unleaded gasoline, you were a fuel smartie. If you opted for E30 as your preferred blend, you were not just a smartie, you were the smartest in the class.

And think of all that extra octane rating you bought. E85 has a higher octane rating than standard 91-octane premium fuel — and you didn’t have to pay the premium fuel price. All these comparisons above are to 87-octane unleaded. The price difference between the fuel grades is anywhere from 20 cents to 40 cents, depending on where you live in the United States,” according to the California Energy Commission. Didn’t cost you anything to get those higher-octane rating attributes.

So give yourself a gold star.

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