AAA Says Blended Gas Prices Could Rise Due to Expiring Ethanol Tax Credit
ORLANDO, FL – The national average for retail gasoline prices U.S. was $3.23 for a gallon of unleaded, as of Dec. 27, according to a news report from AAA. This price is 7 cents less than in November but 19 cents higher than at the same time in 2010. Only three states, Utah, New Mexico, and Missouri, are paying less than $3 per gallon, and only Hawaii is paying more than $4 per gallon.
One of the factors that will likely affect the price of gasoline in 2012 is the end of the ethanol tax credit of 45 cents per gallon, which expires on December 31. The expiration of the current tax credit will result in an increase of about four cents in the price of a gallon of E10 gasoline and about 40 cents in the price of a gallon of E85, according to AAA.
AAA’s weekly review of oil prices shows a mixed picture for the near future. AAA stated that positive economic news in the U.S. is having the greatest effect on pushing oil futures upward. In addition, unrest in the Middle East, specifically sectarian violence in Iraq, which analysts believe is threatening that country’s petroleum production targets, and Iran threatening to close the Strait of Hormuz, a key international shipping route, is helping to keep oil futures above $100 per barrel. AAA said about one-third of all global oil passes through the Strait, which is located between Iran and Oman.