Expiring Ethanol Tax Credit Could Mean Higher Gas Prices
SPRINGFIELD, Ill. (CBS) -- An expiring ethanol tax credit could lead to higher gas prices come 2012.
As WBBM Newsradio's Alex Degman reports, the federal Volumetric Ethanol Excise Tax Credit, or VEETC, expires Jan. 1.
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Oil companies make 4 1/2 cents per gallon of E-10 fuel they produce. That's gasoline with a 10 percent ethanol blend – the most common fuel now found nationwide.
Tricia Braid of the Illinois Corn Growers Association says some oil companies passed the cost savings onto customers, others didn't.
"There's no rule that says they have to," she said. "It just allowed a price advantage in the market. It was an assumption that that price advantage would be passed along to consumers. Recently, it hasn't been in all cases."
Braid says VEETC benefited mainly the oil companies, not farmers or ethanol producers. She says the Corn Growers Association favors the credit's expiration, as it'll produce for the federal government $6 billion a year.
