(The Center Square) – Gas prices have dropped across the country in recent months, but the Illinois Fuel and Retail Association is warning that higher prices may be on the way in the Land of Lincoln.
Illinois and five other Midwestern states opted out of a federal waiver regarding the weight of E10 gasoline, hoping the federal government would require year-round sales of E15.
Gov. J.B. Pritzker renewed his call for year-round E15 sales last month, saying the fuel blend with 15% ethanol would increase demand for corn by 2 billion bushels a year.
Illinois Fuel & Retail Association CEO Nate Harris said Illinois is stuck in the middle of a fight between the refining and ethanol industries.
“If current regulations go into effect in the summer, we’re likely to see 25 to 30 cent per gallon price increases,” Harris told TCS.
Harris said the IFRA supports year-round E15, but until a federal fix is enacted, Pritzker should follow Ohio’s lead by opting back into the E10 waiver.
“The governor can make that request to the U.S. [Environmental Protection Agency], and it’s our understanding that that would most likely be accepted. That would avoid the price increases as well as the headaches for operators,” Harris said.
Harris said the state could wait for emergency waivers instead of requesting the standard E10 waiver.
“The problem with waiting for the emergency waiver is that prices will start to increase for consumers until the waivers are issued,” Harris said.
Harris said operators would buy lighter-waited gas during the waiting period.
“When the emergency waiver comes in, they’ll be stuck with more expensive product. Then they’ll have to compete with states like Indiana or all the other states in the Midwest that are not opting out of this E10 waiver,” Harris said.
Doing nothing and and allowing the op-out to take effect, Harris said, would cause 25 to 30 cent increases.
The governor’s office did not immediately respond to a request for comment.
Harris said if prices go up and volume goes down, tax revenues would also decrease.
At 48.3 cents per gallon, Illinois has one of the highest motor fuel taxes in the United States.
According to AAA, the average per-gallon price for regular unleaded in Illinois climbed back over $3 this week to $3.035 on Friday. The national average was $2.90.
One year ago at this time, the average Illinois price for regular unleaded was $3.26 per gallon.
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