Is bio-ethanol driving up food prices?

Readers in Germany may find this article interesting.  Once again, bio-fuels are being blamed for taking the food out of other peoples’ mouths.

What’s new about the argument this time, is that there is an explanation as to why this is happening.

Normally I hear a straight forward claim, that the production in Europe is taking food out of the mouths of people in Africa – without any thought as to whether the food would have actually been transported to Africa in the first place.

The new claim is somewhat different – due to the bio-ethanol production the price of the raw materials has risen, and that means that aid agencies have to pay more for things such as grain.  This in turn means that they can buy less of it to feed people.

Perhaps more regulation of the system is required so that the aid agencies still get their grain at a reasonable price, without stifling the competition of the bio-fuel producers?

I assume that other types of bio-fuel, eg. from wood chippings, is not affecting these prices and could therefore be a better option?

How about replacing “normal” petrol with bio-ethanol?

Something interesting has happened at petrol stations in Germany in the last few weeks – the price of the “normal” (91 octane) petrol has been brought into line with “super” (95 octane) fuel.

Speculation followed in the German press, that the petrol stations wanted to phase out the lower grade fuel to make space for other products, and so had raised the price to persuade consumers to switch to the next alternative. Indeed, in a number of European countries 91 octane fuel is no longer available.

And whilst some cars being sold in Germany state in their manuals that they should be filling up with the “normal” petrol, others fill up with it just to save money.  But now some petrol stations have stopped selling it altogether.

Of course, it would be nice if they used this extra capacity to sell something new, such as bio-ethanol. Unfortunately, I have the feeling that they will just use it to sell more “super” or even 98/100 octane fuels.  Just imagine what effect it would have if one of the major chains starting selling bio-ethanol nationwide!

There is, however, a glimmer of hope.  I was in Frankfurt last night and spotted a petrol station belonging to one of the major chains selling gas on it’s forecourt (real gas, not just the American English word for “petrol”!)  I that’s at least a step in the right direction.

Petrol prices in 2007

Whilst I may now be filling up with bio-ethanol, I am still interested in the price of normal (95 octane) petrol for my wife’s car. And having just written 3 blog entries about the prices of things going up, I went back through the log book to see if this was true of petrol as well.

We tend to see the price of petrol as something that goes up and down, although more up than down, especially in the summer months.

Actually, it started the year at 1,239EUR/litre and finished off at 1,369EUR/litre – no question about that being a price increase then.

But in-between it reached 1,419EUR/litre (or even more, but we didn’t fill up when it did!) in May, returning to 1,289EUR/litre in August. So even if there was an overall increase, it did go back and forth during the year.

How we long for the Summer of 2003 when we first bought the car, and paid as little as 1,034EUR/litre!

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