50% drop in per-pump fuel sales with switch from gasoline to E85: What Gives?

This week, it has been widely reported that General Motors and Sheetz, a  Pittsburgh-area fuel retailer, have been collaborating on E85 promotions. Sheetz in Monroeville this week offered 85-cent ethanol as a promotion, as a part of the GM E85 Fuel for Thought Tour taking place across the country this fall. Ethanol regularly sells in the area for $2.40, as opposed to $2.79 for regular unleaded.

Sheetz said that it experienced a 50% drop in sales at pumps converted from gasoline to E85. Sheetz spent more than $150,000 this year on E85 conversion at three locations in Western Pennsylvania.

“The story about Sheetz was surprising and disturbing,” commented Tim Curtiss, former CEO of biofuel refiner Liquid Resources. “E-85 should be incredibly cheap RIGHT NOW because the wholesale cost of a gallon of E85 should be around $1.12. E85 should be available and profitable at around $1.95-2.00 per gallon. $2.40 for E85 in a $2.79 E10 market isn’t cheap enough.

The Renewable Fuel Association projects a 10-15% loss in fuel efficiency with E85 compared to unleaded gasoline, which suggests that Sheetz is pricing ethanol at an equivalent price based on cost per mile. The result suggests that E85 should be marketed at an additional discount.

Free Subscription to the Daily Biofuels Digest e-newsletter

Related Stories

Conversion from gas to E85 leads to 50% drop in fuel pump sales

In Pennsylvania, fuel marketer Sheetz is recording a 50% drop in sales at pumps converted from gasoline to E85. Sheetz spent more than $150,000 this year on E85 conversion at three locations in Wester...

Iowa E85 sales double, still below 1 percent of total gasoline sales

In Iowa, the Department of Revenue confirmed that E85 sales for the first half of 2008 reached 3.5 million gallons, already surpassing total 2007 sales. Overall, E85 sales for the state are well under...

Brazil’s National Petroleum Agency says ethanol sales exceed gasoline

In Brazil, the National Petroleum Agency revealed this week that, for the first time, ethanol sales are exceeding gasoline sales in the country. Sales of ethanol are up 44 percent to 4.2 billion gallo...

E10, E20 market share up to 48 percent in Thailand, state oil CEO says production should increase

In Thailand, the CEO of state oil company PTT said that the country can and should use its cassava and molasses resources to increase production of ethanol. In the face of rising oil prices, conventio...

Brazilian flex-fuel cars now have 94 percent market share for new sales; ethanol at 65 percent discount to gasoline cost

In Brazil, UNICA is reporting that heavy rains in South-Central Brazil caused a 23.8 percent fall in sugarcane production in the second half of August, and poor weather conditions are expected to cont...

German biodiesel sales drop 14 percent, B100 off 36 percent

In Germany, Germany’s Protein and Oil Plant Association (UFOP) reported that biodiesel and plant oil fuel sales strongly declined over the last year. Biodiesel sales for admixing purposes increased ...