ICGA STATEMENT REGARDING ETHANOL TAX CREDIT

Tricia Braid

Apr 15, 2014  |  Today's News

Illinois Corn Growers Association President Gary Hudson, a family farmer from Hindsboro, IL, released the following statement in response to media reports citing Illinois Petroleum Marketers Association vice-president Bill Fleischli’s claims related to the ethanol tax incentive.

“Bill Fleischli and the Illinois Petroleum Marketers are looking for ways to scare motorists about ethanol and its impact on gas prices. Talk of increasing the motor fuels tax provided a perfect opportunity, and Mr. Fleischli has since claimed that the elimination of the ethanol tax incentive would increase gas prices by 6 cents. That’s an exaggeration unless the petroleum marketers he represents plan to price-gouge their customers in retaliation for losing an incentive that they see as their own.

The E-10 tax incentive was incredibly successful in bringing a lower cost fuel choice to market. It gave marketers an opportunity to lower their prices in direct relationship to the value of the tax incentive.

Here’s an ethanol tax incentive fact check. Ethanol is cheaper than gasoline at the wholesale level every day, making gasoline containing any amount of ethanol less expensive than gasoline that does not. The ethanol tax incentive is worth roughly three point three cents per gallon at $3.50 gas. If marketers are passing along that incentive to their customers, it should make $3.50 gas $3.47 gas. At most, repealing the ethanol incentive should only move $3.47 gas up to $3.50 gas, and it shouldn’t increase gas prices at all at stations where the tax incentive wasn’t benefiting the customer.”