March 06, 2008

To most gasoline not worth paying extra

Last week a national gas price website ran a poll on how much users will be willing to pay extra for gasoline that didn't contain ethanol. The question asks was...

How much extra per gallon would you pay for a station selling 100% pure gas vs a station with only a 10% ethanol (E10) mix?

Of the 18,910 people that responded 68% said they wouldn't pay anything extra for 100% gasoline over E10. Granted this is an informal poll but since only members can vote in these polls it shows pretty well how the members of the site feel.

This also goes along with the example set in Iowa. In Iowa the standard 87 octane grade of gasoline doesn't contain ethanol. All ethanol is restricted to the mid grade or premium grade gasoline. So the choices the customers make can easily be measured. Those that want 100% gasoline can choose it by restricting purchases to the 87 octane grade. And since the mid grade which contains ethanol is normally cheaper than the 87 octane 100% gasoline grade it shows whether or not consumers are willing to pay extra for 100% gasoline.

The Iowa Renewable Fuels Association announced that Iowans chose E10 (10-percent ethanol, 90-percent gasoline) nearly 74 percent of the time in 2007.

Neither one of these examples was done with any kind of scientific precision but it does give a pretty good indication as to how the general public views the value of the two fuels.

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