California allows the sale of fuels with higher ethanol content to reduce gasoline prices
California Governor Gavin Newsom has signed legislation that allows?the?immediate?sale of a higher ethanol fuel blend. This is to curb the skyrocketing prices at the gas pump in America's biggest auto market.
On Saturday, the signing of Senate Bill 795 removed the last regulatory hurdle to the sale of E15 gasoline, a blend of gasoline containing 15% of ethanol. This was more than a year since state Senators unanimously approved the move. California was 'the only US State where this fuel could not be purchased.
This commonsense bill reduces unnecessary red tape while maintaining our safety and environmental standards. Newsom stated in a press release that "we're making E15 an option for Californian drivers."
This measure is expected to benefit corn and ethanol producers by allowing the?most populous?state of the country to use a higher blend.
Eric McAfee of Cupertino-based Aemetis, a producer of renewable fuels, estimated that the change would add about 650 millions gallons to the annual ethanol consumption in California.
McAfee stated that ethanol is currently sold at wholesale prices of about $2.30 per gallon. This will lead to significant savings when compared with gasoline.
GasBuddy's data shows that the average gasoline price in California hovered near record levels on Sunday of $6.14 per gallons, compared to a national rate of $4.44.
California has approved the sale of E15 year-round in California, while Congress is weighing separate legislation that would allow nationwide sales of E15.
After the US war against Iran, fuel prices have risen and there are concerns over disruptions in crude supply. California has felt the impact most acutely, as it already has some of the highest gasoline prices in the United States due to its high taxes, strict fuel standards and reliance on imported petroleum products.
According to the Renewable Fuels Association, E15 could reduce retail gasoline prices in California by at least $2.7 billion per year and by approximately 20 cents a gallon. This was based on a study conducted by economists from the University of California at Berkeley and the US Naval Academy.
(source: Reuters)
