Hatch’s office examining E85 gasoline price spike

09/20/2005

September 20, 2005

Increases in the price of ethanol-heavy E85 gasoline have caught the attention of state Attorney General Mike Hatch.

In recent weeks, the price of E85—85 percent corn-based ethanol—has risen at about the same rate as pure gasoline. Hatch said farmers aren’t seeing corn prices go up and E85 retailers are earning about the same profits as before. “Everybody points fingers at everybody else,” he said.

Hatch can’t take legal action unless he proves that ethanol producers or marketers conspired to raise prices.

Vern Eidman, a professor in the University of Minnesota’s applied economics department, said it looks like a simple case of supply and demand. “I have no evidence of collusion,” Eidman said.

Hatch’s office is issuing subpoena-like documents seeking E85 pricing information. E85 is sold at nearly 150 stations in Minnesota for “flexible fuel” vehicles that can burn either regular gasoline or the higher ethanol blend.