NPN Magazine April 2013

National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.

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TOP OF THE NEWS PMAA signs letter urging repeal of health insurance tax Tax likely to be passed onto small businesses P etroleum Marketers Association of America has signed a letter which commended Reps. Charles Boustany (R-LA) and Jim Matheson (D-UT) for reintroducing bipartisan legislation, which would repeal a tax imposed on health insurance providers included in the Patient Protection and Affordable Care Act (PPACA). Last Congress, the bill garnered 226 cosponsors. Although the tax is imposed on health insurance companies, it's likely the tax will be passed onto small businesses through higher n Gasoline and diesel fuel prices continue to decrease The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, according to the April 3 issue of This Week in Petroleum, published by the Energy Information Administration (EIA). That price is down 30 cents from last year at this time, according to the weekly report. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents. The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky April 2013 premiums forcing small business owners who remain in the insurance market to self-insure. The non-partisan Joint Committee on Taxation found that the tax will raise insurance premiums on average by $350–$400 per affected family in 2016. Furthermore, Senator Rob Portman (R-OH) recently introduced the "Small Business Health Relief Act" (S. 24), which would repeal the insurance tax along with other taxes in the PPACA. Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively. n RFA: Study rules out RIN credits as factor in higher gas prices; API responds The Renewable Fuel Standard (RFS) and its associated "RIN credits" have not been a factor in this spring's higher retail gasoline prices, according to an analysis conducted by Informa Economics, Inc. The study, commissioned by the Renewable Fuels Association (RFA), found ethanol costs significantly less than gasoline at the wholesale level and is reducing pump prices for consumers across the country, the RFA said in a March 27 statement posted on its website. Here is more, based on the statement: "A fact-based review of developments in the gasoline, ethanol and RIN [Renewable Identification Number] 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 concluded. Responding to the independent study's findings, Renewable Fuels Association (RFA) President and CEO Bob Dinneen said, "Not surprisingly, opponents of the RFS have absurdly suggested RINs are a reason for this spring's higher gas prices. This report puts that silly notion to rest and clearly confirms that RINs are not having any noticeable impact on gasoline prices. In fact, as the Informa analysis plainly shows, increased ethanol use leads to lower—not higher—prices at the pump for American consumers. The facts and data speak for themselves. Drivers could realize even greater savings at the pump if refiners and blenders would break down their self-inflected blend wall and give up their stubborn resistance to offering E15 and E85." The analysis commissioned by RFA found RINs are likely contributing no more than $0.004 (four-tenths of one cent) to the retail price of a gallon of gasoline. Meanwhile, ethanol's wholesale discount to gasoline in 2013 has reduced the pump price for blended gasoline by an average of $0.044 per gallon. Thus, when the net impact of both RIN costs and ethanol's discount to gasoline are considered, ethanolblended gasoline is saving consumers an average of $0.04 per gallon based on straight blending economics. "Considering both the ethanol price advantage and the direct cost of RIN prices, the net benefit to consumers from the usage of ethanol is $0.04 per gallon of gasoline…" the report found. According to the authors, this savings doesn't take into account either the indirect benefit that ethanol has on gasoline prices by effectively lowering demand for crude oil and clear gasoline or the enhanced octane value of ethanol over gasoline. High gasoline prices in early 2013 can be explained by several factors unrelated NPN Magazine  n

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