How much would the stuff actually cost after the government is done taxing it to death?
Oil prices are artificially high, in part, because the government taxes all through the system, that all get calculated back to the end user, on top of the 10% or something that's directly taxed.
The oil companies would make less, but the industry wouldn't just disappear, most of our modern day plastics and polymers are based on oil, along with a shit load of other products.
Further, even if this new fuel is actually produceable on a large enough scale, which is going to take at least a decade (it takes quite a while to build a large scale chemical plant, and even longer than it should thanks to Uncle Sam) it still needs to be distributed.
The oil companies already have the infrastructure in place for that and can easily make a lot of profit just from doing that.
If the price quoted is correct for large scale production, the fact that it's produced so much cheaper will recoup for a lot of their losses in the oil industry, seeing that oil has a high production cost.
I don't think it would meet much resistance from becoming our next fuel, considering all things involved... IF the stuff actually works, and IF it can easily and cheaply be produced.