Washington - May 21, 2008 - This week, the heads of the largest oil and gasoline refining companies are testifying before Congress about the daily new record high prices for oil, gasoline, and diesel fuel in advance of Memorial Day and the summer driving season. With the price of crude oil reaching nearly $130 per barrel and gasoline heading for $4 per gallon, consumers are looking for any relief they can find at the gas pump.

The American Automobile Association (AAA) predicts that nearly 32 million drivers will travel by auto this Memorial Day weekend. Because ethanol is keeping gasoline prices about 15% lower than they otherwise might be, the gasoline price savings this weekend alone will amount to over $200 million – enough for 133 million cups of Starbucks coffee

While American drivers are facing steep gasoline prices averaging $3.80 a gallon going into the Memorial Day weekend, farmers and truckers face diesel fuel prices of $4.50 a gallon. This is unprecedented. Never before has diesel fuel (cheaper for refiners to produce compared to gasoline) been so much more expensive than gasoline for such an extended period of time. A key reason for lower-priced gasoline – the availability of less costly ethanol adding to supply, reducing imports and helping to keep a lid on prices.

Here’s what the experts are saying:

Ethanol keeps gasoline prices down
“Without biofuels, which can be refined to produce fuels much like the ones made from petroleum, oil prices would be even higher. Merrill Lynch commodity strategist Francisco Blanch says that oil and gasoline prices would be about 15% higher if biofuel producers weren't increasing their output.”
The Wall Street Journal, March 24, 2008.

“…the growth in ethanol production has caused retail gasoline prices to be $0.29 to $0.40 per gallon lower than would otherwise have been the case.”
Center for Agricultural and Rural Development, Iowa State University, April, 2000

Increased biofuels production reduces US and world oil demand
“Just offsetting the biodiesel and ethanol added to the U.S. and European markets since 2005 would require around 1 million barrels a day of additional crude oil supplies to be processed.”
International Energy Agency, May 12, 2008

“[In 2008] After accounting for projected increases in ethanol use, U.S. petroleum consumption is projected to fall by 330,000 bbl/d.” 
Energy Information Administration, Short-term Energy Outlook, May 6, 2008

US ethanol production reduces gasoline imports
“Bill Day, a spokesman for Valero Energy Corp., the largest U.S. oil refiner, said his company foresees ethanol growth ‘offsetting gasoline imports to the U.S.’”
Reuters, February 14, 2008