Energizing Michigan

Market Prices

Ethanol prices over the past 10 years have been highly variable (see chart) ranging from as low as a $1.00 per gallon to more than $4.00. During this time period, the ethanol industry has gone through a rapid expansion, partly driven favorable prices caused by a national push for more renewable fuels, improved technologies, and the need for an oxygenate to replace MTBE for reformulated gasolines. As the industry has grown, the price relationship between gasoline and ethanol has also been variable. Before 2004, the price of ethanol was generally above the price of gasoline. More recently, the relation has been reversed.

The price of ehtanol in the past 18 months has also been highly variable (see chart). This variability reflects the ups and down in the gasoline market and supply and demand factors in the ethanol industry.