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May 2, 2005
FUEL MUST BE MECHANICALLY DYED
Diesel fuel and kerosene removed from a refinery, terminal, or blending facility will only qualify for a tax exemption if the fuel is dyed using a mechanical injection system approved by the government under temporary regulations proposed. regulations isssued by the IRS on April 25, manual or splash dyeing will no longer be acceptable as of October 24, 2005. The IRS has set a hearing for July 19 and will ask for comments to be filed by June 27. SIGMA has long supported the dye requirement to help combat tax evaders who unfairly apply for the tax credit. SIGMA counsel will be drafting a legal memo on the subject that will be posted on SIGMA’s website as soon as it becomes available. The proposal may require changes in operation for some marketers and terminal operators who are currently hand or splash blending.
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LIQUIFIED GAS DEBATES
President Bush has called for federal regulators, not states, to have the final say over the location of liquefied natural gas (LNG) terminals. The proposal has spawned heated debates from several states where facilties are being eyed. The Bush administration has been looking for ways to speed up the building of energy facilities in light of rising prices and supply shortages. States in which these facilities have been proposed are concerned over the safety risks, citing that a terrorist attack on a tanker delivering LNG could produce a hot enough fire that people would feel almost a mile away. There are currently four import terminals (Maryland, Georgia, Louisiana, and Massachusetts.) Approximately 50 more are in various planning stages. The energy bill approved by the House last week would make the federal energy commission the final authority in choosing sites for LNG facilities. A move to include a similar provision in the Senate energy bill is expected next month.
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SIGMA SUPPORTS TOLL ROAD AMENDMENT
SIGMA signed on to a joint letter to the Senate last week in support of the Hutchinson-Nelson amendment. The proposed amendment to the surface transportation reauthorization bill (S. 732) will prevent tolls from being imposed on existing Interstate Highways. The amendment would eliminate a pilot program that was created in 1998, that allows demo projects in up to three states to toll these existing highways. A copy of the letter can be found on SIGMA’s website at http://www.sigma.org/pdf/Senate-group-toll-letter.pdf
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SIGMA COMMENTS ON WETLINE PROPOSAL
Last week, SIGMA filed comments on SIGMA’s behalf (based on information provided by our members) strongly opposing the proposed rulemaking by the Department of Transportation that would require that all tanker trucks be fitted with a device to clear product lines. The DOT proposal claims several incidents were caused by tanker wetlines and they pose significant safety risks. A copy of the letter can be found on SIGMA’s website at http://www.sigma.org/pdf/SFX15F6.pdf
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JOHNSON CONFIRMED
On April 29, The U.S. Senate confirmed Acting EPA Administrator Stephen L. Johnson's nomination as the tenth Administrator of the United States Environmental Protection Agency. President George W. Bush nominated Johnson for the position this past March.
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NEW BIODIESEL PLANTS
A facility that will be able to produce 30 million gallons of biodiesel a year using soybean oil will be built in Missouri. Ownership of the plant will be split between MFA Oil, Ray Carroll County Grain Growers, Mid-America Bio-Fuels, and Illinois based agribusiness conglomerate Archer Daniels Midland Co. Ground for the facility will be broken soon. In similar news, researchers in North Dakota planned to test canola oil as a possible source of diesel engine fuel by powering tractors with a canola-derived biodiesel. Officials say they will measure the alternative fuel’s performance for such things as exhaust and horsepower. This project comes on the heels of an announcement that a biodiesel plant will be built in this state as well.
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BUSH: BOLSTER REFINERIES
On April 26, President Bush presented a plan to offer federal risk insurance to companies to encourage the construction of oil refineries on closed military bases in the U.S. The plan comes amidst allegations that the U.S. is suffering from high gasoline costs because of lack of refining capability. The president acknowledged that his plan would not lower gasoline process today, but would help offset the costs in the future.
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SIGMA SUMMER LEGISLATIVE MEETING
SIGMA’s annual Summer Legislative Meeting is scheduled for July 19-20 this year in Washington, DC. This conference presents a golden opportunity to communicate with members of Congress about the importance of policies designed to enhance supply and fungibility of supply as well as other myriad issues surrounding the business. Our goal is to make 200 Hill visits this July—a 30% increase over last year. Make your voice heard. In addition, a panel discussion will be presented including speakers from API, EIA, and the CFTC on crude and finished products pricing and the role of the futures markets in price volatility. To download a registration form, please go to SIGMA’s website at http://www.sigma.org/pdf/05SummerLEGRegForm.pdf
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HIGH GAS PRICES LEAD TO PUBLIC TRANSIT USE
Several public transit authorities in many states are reporting increased public transportation use in light of higher gasoline prices. Although there is not a conclusive study to support whether the trend is happening nationally, the increase in ridership does seem to be the result of high fuel prices. Ohio transit authorities are among those that have seen the increase. Although they have to pay higher gas prices to operate their public transportation system, they are hoping that more passengers will offset the increased cost.
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GAS STATIONS AS GOURMET CENTERS?
In a report from the Associated Press, gas stations and convenience stores are transforming themselves with upscale fare to shed their image of junkfood pit stops. The shift is well-timed as c-stores and gasoline stations have relied heavily on gasoline sales and cigarette sales for more than three-quarters of their sales. As profit margins are slipping on these products, the retail industry is facing tough competition from grocers adding fuel pumps and drug stores offering food. Retailers are hopeful the shift will attract return customers on a daily basis.
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SITE DESIGN CONTEST
NPN magazine has announced its new 2005 NPN Site Design Awards contest. This contest will award retailers with leading store, fuel island, profit center and complete site design strategies. NPN is currently accepting entry forms (free entry) for this contest. The deadline for entries is August 1, 2005. Entry is open to all retailers who have remodeled and/or razed and rebuilt a current site, or opened a newly built site between March 31, 2003 to March 31, 2005. A PDF version of the entry form is attached to this email. Additional entry forms can be downloaded from our web site at http://www.npnweb.com/sitedesign.asp. The NPN Site Design Awards will be an annual contest. The winners will be featured in this year's December 2005 edition of NPN magazine and presented with the awards at the Fall SIGMA Annual Meeting in Philadelphia. PA, on Oct. 21-23, 2005.
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SEE YOU THERE!
Have you already packed for Amelia Island? If not, grab your golf clubs and dress for island temperatures in the high 70s. SIGMA updated its web site with last minute information you’ll need before your trip, including golf information, a restaurant list and transportation options/directions from the Jacksonville Airport (JAX).
SIGMA reached its participation goal for the Spring Convention and now it is in the process of changing gears—to do the same for the upcoming Annual Meeting in at the historic Loew’s Philadelphia hotel in Philadelphia, Pa. from October 21-23. “Philadelphia is the perfect city to learn about what’s going on in the industry today,” said Joe Stark, Annual Meeting Chairman and President of Top Star, Inc. “Its historical roots will encourage members to learn from past mistakes and forge into the future with a renewed energy.” This meeting serves a wide-range of individuals in the petroleum marketer arena. From independent gasoline and c-store chain owners to equipment suppliers, the SIGMA Annual Meeting is your one-stop shop for the best information and educational forums in the industry. Attendees can anticipate top-of-the-line speakers and stimulating business strategy discussions that will keep fuel marketers’ operations running full-steam ahead in this volatile gasoline market. For more information and early-bird registration opportunities, visit SIGMA’s web site at http://www.sigma.org/meetings/2005_annual/registration.pdf or call (703) 709-7000.
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SOT FORM UPDATE
The Alcohol and Tobacco Trade Bureau recently corrected a March notice that suspended the special occupational tax (SOT) for certain businesses under the American Jobs Creation Act of 2004. The correction made clear that all taxpayers must still file the return annually even if they are not required to pay the tax. SOT remains payable for all industry members including new business until July 1, 2005.
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SIGMA Weekly Report May 2, 2005 © Copyright SIGMA, 2005
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