Additive may push gas prices up

Feb. 12, 2008 at 2:47 PM
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NEW YORK, Feb. 12 (UPI) -- The price of gasoline could spike by springtime in the United States due to a gasoline additive that most people have never heard of.

The price of alkylates "is a sleeping elephant," Sander Cohan, an oil market analyst at Energy Security Analysis told The Christian Science Monitor.

The price of alkylates is more than 40 cents higher per gallon than gasoline and is in sudden demand with the surge of ethanol use, the report said.

With or without alkylates, however, the price of gas inexplicably jumped 23 cents per gallon in some states Sunday and Monday. Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin all saw prices jump this week, said.

Alkylates, however, slip under the public's scrutiny, said economist John Felmy, telling he Monitor: It makes up 15 percent of gasoline by volume and helps with performance. But, "we don't maintain any statistics on it. The Department of Energy does not keep any information."

Estimates of how far the price of gas will go vary.

"We keep waiting for an area of consumer resistance to the price," said Mike Fitzpatrick of MF Global, a commodity broker. "We think it might be around $4 a gallon," he said.

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