Expiring Ethanol Tax Credit Could Mean Higher Gas Prices

SPRINGFIELD, Ill. (CBS) — An expiring ethanol tax credit could lead to higher gas prices come 2012.

As WBBM Newsradio’s Alex Degman reports, the federal Volumetric Ethanol Excise Tax Credit, or VEETC, expires Jan. 1.

LISTEN: WBBM Newsradio’s Alex Degman reports

Oil companies make 4 1/2 cents per gallon of E-10 fuel they produce. That’s gasoline with a 10 percent ethanol blend – the most common fuel now found nationwide.

Tricia Braid of the Illinois Corn Growers Association says some oil companies passed the cost savings onto customers, others didn’t.

“There’s no rule that says they have to,” she said. “It just allowed a price advantage in the market. It was an assumption that that price advantage would be passed along to consumers. Recently, it hasn’t been in all cases.”

Braid says VEETC benefited mainly the oil companies, not farmers or ethanol producers. She says the Corn Growers Association favors the credit’s expiration, as it’ll produce for the federal government $6 billion a year.

  • Wolf

    Just remove the ethanol additives…it is insane to keep adding to the debt and subsidize these ridiculous schemes…

    • Yard Ape

      EXACTLY!!!!! Congress can take these scams and stick them straight up all of their @ ss es!!!!!! Ofcourse the democrats can be the first to bend over and take it unlubed !!!

  • Richard

    Yeah, they remove the tax credit but keep the mandate that says 10% of the gas has to be ethanol. Of course the corn industry supports this. Remove the damn 10% requirement!

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