—> Does adding ethanol increase or decrease refining costs? <—
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Since the ethanol is blended with the gasoline after refining,
adding ethanol has no impact on the refining cost.
The ethanol just serves to “water-down” the gasoline.
By adding the blending step into the manufacturing process it by definition adds cost to the process.
The fact it is not needed to produce useable gasoline would indicate it is also a wasteful step.
“Since the ethanol is blended with the gasoline after refining,
adding ethanol has no impact on the refining cost.
The ethanol just serves to “water-down†the gasoline.”
So the right question to as is what are the relative costs of Ethanol and Gasoline?
My guess is that Ethanol is more expensive, hence the price of the combined fuel is greater than if we just used gasoline. Also, Ethanol is a bad actor for your car’s fuel system and even worse for your chain saws and other gasoline engine-powered tools. I have had to resort to the purchase of VP gasoline only fuel (Retail: $7.00 per quart) for my tools just so they will run when I need them. Fuel stabilizers don’t work all that well on ethanol laced gas.