Gasoline demand drops 25%, halts ethanol blending


Gasoline demand drops 25%, halts ethanol blending

Ethanol production has seen the highest weekly decline on record as social distancing orders from COVID-19 slow travel.

University of Illinois Ag economist Scott Irwin tells Brownfield the U.S. Energy Information Administration report shows just how much fuel demand has decreased.

“Over a two-week period, it looks like the total gasoline consumption in the Us has dropped by 25%.”

He says there is a lot of chatter about energy companies potentially taking ethanol out of the E10 gas blend to be more competitive at current price levels. But, Irwin says it is not 100% clear that E10 is noncompetitive yet and the Renewable Fuels Standard can come into play as a safety net.

“Whatever gasoline that we use through the remainder of 2020, I still expect that it will all contain 10% ethanol.”

Irwin says ethanol, gasoline and crude oil prices are all reacting to the contraction in economic activity while crude oil and gasoline are seeing an extra decline related to the price war between Russia and Saudi Arabia.

Interview with Scott Irwin

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