Hurricane Update: DOT, EPA, States Continue to Lift Restrictions to Aid Emergency Response

September 6, 2017

The U.S. Government along with Florida and Texas continue to lift restrictions that hinder emergency response to incoming Category 5 Hurricane Irma and Hurricane Harvey. 

Florida Gov. Rick Scott on Sept. 5 suspended all tolls across the State of Florida to allow people to more easily prepare for Hurricane Irma and evacuate. The Federal Motor Carrier Safety Administration (FMCSA) issued a Regional Emergency Declaration in advance of Hurricane Irma for the States of Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, the Commonwealth of Puerto Rico and the territory of the U.S. Virgin Islands. EPA issued a waiver to allow the use of red-dyed 15 ppm "non-road locomotive and marine" (NRLM) diesel fuel in diesel-powered highway vehicles in the entire state of Florida, and the IRS said it will not impose a penalty when dyed diesel fuel is sold for use or used on the highway, expanding coverage to the entire state of Texas, due to a shortage of undyed diesel fuel. 

FMCSA's emergency declaration triggers the temporary suspension of certain Federal safety regulations for motor carriers and drivers engaged in specific aspects of the emergency relief, including direct assistance for the immediate restoration of essential services (such as electrical, sewer, water, and telecommunications) or essential supplies (such as food, water, medical supplies, and fuel). Read FMCSA's Emergency Declaration HERE.

Pressure on retail demand for fuel continues to spike as evacuations are underway in Florida in anticipation of Irma.

EPA late Sept. 6 issued a waiver to allow the use of red-dyed 15 ppm "non-road locomotive and marine" (NRLM) diesel fuel in diesel-powered highway vehicles in the entire state of Florida. EPA said the fuel supply situation in Florida and along evacuation routs remains impacted due to Hurricane Harvey, and the evacuations now underway due to Hurricane Irma have and will continue to deplete already constrained supplies of compliant diesel fuel in the state of Florida. Read EPA's waiver HERE.

The Oil Price Information Service (OPIS) reported Sept. 6 that many unbranded retailers are facing supply allocations and in some cases have been cut off as fuel suppliers prioritize their branded customers amid tightening supply. Tightening supplies means that rack prices are shifting for branded and unbranded fuel.

In a normal market, branded prices are typically higher than those of unbranded.

However, OPIS reported that in Miami, the CBOB gasoline rack price spread between the lowest branded posting and the highest unbranded posting was about 14cts/gal early on Wednesday, according to OPIS and its daily rack price database. In Miami, ExxonMobil had the lowest branded price at $1.8498/gal, and the highest unbranded price of $1.9865 was posted by Gulf.

One refiner had a 12-ct.gal branded-unbranded price spread for some Florida racks on Wednesday, according to OPIS' daily rack price database.

Meanwhile, the Internal Revenue Service (IRS)said it will not impose a penalty when dyed diesel fuel is sold for use or used on the highway, expanding coverage to the entire state of Texas, due to a shortage of undyed diesel fuel. 

The IRS said its relief applies beginning Aug. 25, 2017 through Sept. 15, 2017, in the areas and counties for which the Environmental Protection Agency (EPA) issued waivers for Texas Low Emission Diesel Fuel. The EPA waiver does not apply to the Internal Revenue Code penalty for using adulterated fuels that do not comply with applicable EPA regulations. Consequently, diesel fuel with sulfur content higher than 15 parts-per-million may not be used in highway vehicles.

The IRS penalty relief is available to any person who sells or uses dyed fuel for highway use. In the case of the operator of the vehicle in which the dyed fuel is used, the relief is available only if the operator or the person selling the fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use. The IRS will not impose penalties for failure to make semi-monthly deposits of this tax. IRS Publication 510, Excise Taxes, has information on the proper method for reporting and paying the tax. (Ordinarily, dyed diesel fuel is not taxed, because it is sold for uses exempt from excise tax, such as to farmers for farming purposes, for home heating use and to local governments for buses.)

A full list of Florida actions in advance of Hurricane Irma is available HERE. 

 

 

 

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