The NERA study projected that the RFS would decrease the U.S. Gross Domestic Product, lower American take-home pay and cause significant increases in the costs of diesel fuel and gas by 2015.
Some lawmakers seem to be on same page
Sens. David Vitter, R-La., and Lisa Murkowski, R-Alaska, spoke up on the issue in a letter to Environmental Protection Agency Director nominee Gina McCarthy March 20, requesting that she outline a plan to "protect American citizens from rising gas prices due to the rising cost of ethanol Renewable Identification Numbers."
The Senators contend that rising RIN costs are because of the approaching blend wall, increased uncertainty in the RIN market, and unrealistic RFS mandates. Further, they say, the market volatility is being passed to consumers in the form of higher gas prices.
Ethanol industry study points in different direction
Despite the claims, the ethanol industry says rising RIN prices aren't the culprit of higher gas prices. If anything, they say, ethanol's wholesale discount to gasoline in 2013 has reduced gas prices by an average of $0.04 per gallon.
RFA says the Informa study indicates RINs are likely contributing no more than $0.004 to the retail price of a gallon of gasoline.
"A fact-based review of developments in the gasoline, ethanol and RIN markets indicates that the Renewable Fuel Standard in general and RINs in particular have not been a demonstrable factor in the rise in retail gasoline prices that has occurred in early 2013," the report said.
High gasoline prices in early 2013 can be explained by several factors unrelated to the RFS, RINs, or ethanol use, the report said, pointing to seasonal patterns.
"The increase in gasoline prices and crack spreads during the first quarter of 2013 has been generally consistent with increases experienced in 2011 and 2012, despite the fact that conventional ethanol RIN prices averaged $0.03 during the first quarter of 2011 and $0.02 during the first quarter of 2012," the report concluded.
Citing a Department of Energy analysis, the Informa report also notes that higher gasoline prices have stemmed from planned and unplanned refinery maintenance; the low starting level for gasoline crack spreads going into 2013; preparation for seasonal fuel specification changes; and developments in global product demand.