Question-and-Answer Session
Operator
Your first question comes from the line of Jeff Dietert - Simmons.
Jeff Dietert - Simmons
I was hoping you could talk a little bit about adding the blending capacity at Tyler and how that’s influencing profitability there. The $0.50 credit that historically was passed back to the ethanol producer, I would assume you’re keeping that at this point and perhaps tell us how you expect that to evolve going forward.
Ezra Uzi Yemin
Just to make sure that we heard the first part of the question, I suspect that you were asking about economy in Tyler, right?
Jeff Dietert - Simmons
Yes, in Tyler. But I would be interested in the impact on profitability at the retail outlets as well.
Ezra Uzi Yemin
We’ll give you both of them then. What we did during the fourth quarter of last year, if you recall, there was a period of time that crude oil jumped almost to $100 and ethanol didn’t follow it; now, it’s a little different.
But when the time came and there was like a $0.50 difference between the price of ethanol and price of gasoline, between the price of (inaudible), if you will, what we did, we locked in that differential for the entire year of 2008.
I’m giving you exact numbers so that will help you do your own calculations; in Tyler, we are selling around 2,000 barrels. It’s going to be probably a little higher than that but you can call it now 2,000 barrels per day of ethanol at a discount of 41% to (inaudible) plus the $0.51 of the governance, so basically $0.92.
Obviously, we need to give some to the customers; you can assume that between $0.02 to $0.03 are going back to the customers. So you’re selling about between $0.06 to $0.07 in Tyler per gallon for 2,000 barrels per day. That’s the Tyler area.
In regard to the macro side, we locked in the entire year with approximately another 1600 to 1700 barrels per day for macro. And that number is around 30; it depends on the market, it depends on different markets, but call it between 25 to 30 under (inaudible) plus the $0.50, which makes it around $0.75 under or $0.075 under, if you take into account the 10%. And in that regard, we probably need to give the customers between $0.025 to $0.03, so we keep to ourselves forward to $0.05 per gallon on those 280 stores.
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