One thought on “Prices Surge”

  1. The demand side will continue to drive supply. With more and more states adopting E10 mandates, and the domestic manufacturers gaining CAFE exemptions by making flex-fuelers, ethanol profits will be there for some time to fuel supply.
    The subsidy is now counter-productive. Market investment requires a degree of certainty, and investors know the subsidy can be taken away at any time. Phasing out the ethanol subsidy while phasing in a like-sized gasoline tax would spur ethanol investment, in my view. With prices for petrol at $3, the subsidy is not needed, and markets are not fickle, but governments are.

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