According to the White House, Americans are seeing the cheapest summertime gas prices since 2021 — more than 20 cents less than last year at this time – and a new study shows ethanol is helping to keep gas prices lower.

The study was done by energy researcher George Hoekstra of Hoekstra Trading who analyzed the economics of substituting ethanol for refinery-derived gasoline, considering the effects on both octane value and energy content and estimating the cost of refinery-derived octane to be 4.5 times higher than that of ethanol-derived octane.

Hoekstra concludes, “The energy equivalent substitution to a level of 10 percent ethanol implies that ethanol is adding a net of 39 cents/gal worth of octane to the U.S. E10 gasoline pool. To say this another way, if ethanol was removed from the U.S. gasoline pool, replacing its current octane contribution with refinery octane would increase refining cost and the wholesale cost of gasoline by 39 cents per gallon or $54 billion/year.”

Hoekstra also estimated that the cost savings per gallon of finished gasoline increase as ethanol content increases. The study found that using blends like E15, which are becoming more widely available in the U.S. market, results in even larger savings. The study was commissioned by the Renewable Fuels Association (RFA). “As our nation again prepares to celebrate its freedom on July Fourth, this report demonstrates the enormous value of American-made ethanol in promoting energy independence,” said RFA President and CEO Geoff Cooper. “Blending low-cost ethanol into gasoline is a proven strategy for reducing fuel prices and strengthening the U.S. market’s resilience against global supply chain disruptions.”