Arguments in Favor of Legislation Requiring Access to "Clear Fuel"
Independent marketers are the most price competitive segment of the retail market. For over 25 years, marketers have used ethanol to enhance their competitive position in the market, thus lowering prices and benefiting the consumer.
Blended gasoline and ethanol are never shipped by pipeline: only clear gasoline, RBOB (Reformulated Blendstocks for Oxygenate Blending) and CBOB (Conventional Blendstocks for Oxygenate Blending) are shipped in pipelines. Gasoline/ethanol blends, such as E-10 (gasohol) are created via "in line blending" at the terminal or by "splash blending." Because all the components to make a gasoline/ethanol blend are stored in the terminal in separate, segregated tanks, legislation requiring a supplier to provide "clear" gasoline, RBOB, or CBOB to its independent customers creates no legitimate burden on the refiner suppliers.
There are distinct economic benefits associated with blending ethanol with gasoline, RBOB, and CBOB. By refusing to sell clear gas to marketers, suppliers: 1) deny marketers the ability to accrue the value of the RINs and any tax or other cost benefit available to ethanol blenders, and 2) retain those economic benefits for themselves.
In short, marketers historically benefited from being able to blend ethanol with clear gasoline and used those benefits to compete aggressively at retail. Due to the highly competitive nature of the retail business, marketers are much more likely to pass the benefits associated with this activity on to the consumers than are their wholesale suppliers.
SIGMA's Mission: To benefit our members by helping them improve their ability to succeed
in a free and fully competitive market for transportation fuels.
