A new report highlights the significant role American-made ethanol plays in keeping gasoline prices down, saving U.S. drivers more than $50 billion annually, an average of 39 cents per gallon, according to the release by Renewable Fuels Association (RFA).
“As the nation prepares to celebrate Independence Day, this report underscores the powerful impact of domestic ethanol production on our energy security,” said Geoff Cooper, President and CEO of the Renewable Fuels Association (RFA). “Even with record levels of U.S. crude oil production, recent global events continue to demonstrate that international oil markets can still influence domestic fuel costs. Ethanol, as a low-cost and reliable gasoline blendstock, provides a critical buffer against those price shocks.”
The study, authored by George Hoekstra of Hoekstra Trading LLC, a veteran in petroleum refining and technology, examines the financial and technical advantages of using ethanol in the U.S. fuel mix. The report compares ethanol with refinery-derived components used to boost gasoline octane levels and finds ethanol to be a far more cost-effective option.
According to Hoekstra’s findings, ethanol provides high-octane value at a fraction of the cost—approximately 4.5 times less than that of refinery-sourced octane. His analysis concludes that the presence of ethanol in the U.S. E10 fuel blend—10% ethanol by volume—lowers the wholesale cost of gasoline by about 39 cents per gallon. Without ethanol, replacing its octane contribution with refinery alternatives would raise costs by $54 billion per year.
The study also indicates that higher ethanol blends like E15, now increasingly available at retail stations, offer even greater savings per gallon of gasoline. E10 remains the standard fuel blend in the U.S., but the report suggests that expanding the use of higher-ethanol blends could lead to deeper cost reductions for consumers.
While the report focuses on octane-related cost impacts, it does not factor in the broader economic benefits of ethanol—particularly its contribution to U.S. fuel supply. Ethanol adds roughly 1 million barrels per day to the fuel market, which also helps stabilize prices by increasing overall supply.
The findings reaffirm ethanol’s role not only in lowering costs at the pump but also in reinforcing American energy independence and reducing vulnerability to global oil disruptions.