Three national fuel groups on Thursday urged the Federal Energy Regulatory Commission (FERC) to abandon a prospective plan to restructure how interstate pipelines establish contracts with shipping companies, warning that it would force consumers to pay more for diesel and gasoline.
Source: NATSO / PR Newswire
NATSO, which represents truck stops and travel centres, SIGMA, America's leading fuel marketers, and the National Association of Convenience Stores (NACS) said the plan would grant monopolistic pricing power to the pipeline industry and impose significant upward pressure on diesel and gasoline prices throughout the country, in the groups' words. The groups, which say they represent 90 percent of fuel sold at retail, argued that permitting interstate oil pipelines to negotiate transportation rates individually would raise fuel prices and violate the Interstate Commerce Act.
“The Administration is looking for creative ways to keep fuel prices as low as possible; this proposal is at odds with everything we've seen the Administration pursue,” said David Fialkov, head of government affairs for NATSO and SIGMA, in the groups' statement. “What FERC is looking at would raise gas prices and diesel prices.” Doug Kantor, NACS senior vice president of government relations and general counsel, said the plan “would increase costs while providing little benefit to the marketplace” and urged FERC to stick with current regulations.
Bloomberg, in independent reporting carried by EnergyConnects, described the prospective policy differently in detail: it would allow operators of pipelines that carry oil, gasoline and diesel to strike individual deals, according to people familiar with the initiative who asked not to be named because it has not been made public. Bloomberg said current rates generally reflect an inflation-based index and are subject to price ceilings, although FERC can authorise market-based rates in some circumstances, and that a proposal would need the support of at least three of the agency's five commissioners to advance in a formal rulemaking.
Source: Bloomberg via EnergyConnects
FERC Chair Laura Swett, whom Bloomberg said is playing a lead role in developing the proposal, said in a statement that she has a responsibility to make sure every American family has access to abundant, affordable energy, that she set up an oil task force to engage with stakeholders, and — in her words — “such reforms are not on my agenda for this year.”
No formal rulemaking was announced in either report on Thursday. For truck drivers — including the many Punjabi owner-operators who buy diesel at truck stops every day — the dispute is about whether a change in how pipeline shipping is priced would eventually reach the pump. The retailer groups say it would; FERC's chair says the reforms are not on this year's agenda.