Fuel Retailers Encourage Federal Energy Commission to Abandon Plan That Would Force Consumers to Pay More for Gasoline and Diesel
ALEXANDRIA, VA. — NATSO, representing truck stops and travel centers, SIGMA: America’s Leading Fuel Marketers, and the National Association of Convenience Stores (NACS) encouraged the Federal Energy Commission (FERC) to abandon a prospective plan to restructure how interstate pipelines establish contracts with shipping companies. The plan under consideration would grant monopolistic pricing power to the pipeline industry and force consumers to pay more for diesel and gasoline.
“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. “What FERC is looking at would raise gas prices and diesel prices. I don’t know why it’s even on the table right now.”
NATSO, SIGMA and NACS, which represent 90 percent of fuel sold at retail, urged FERC to abandon any plans to initiate a rulemaking that would permit interstate oil pipelines to negotiate transportation rates individually with shipping companies. Such an approach would raise fuel prices andviolate the Interstate Commerce Act.
“This new plan would increase costs while providing little benefit to the marketplace,” said Doug Kantor, NACS senior vice president of government relations and general counsel. “It will be better for consumers, retailers, and the broader market if FERC sticks with current regulations.”
In a letter to the five FERC Commissioners, NATSO, SIGMA and NACS said, “Permitting pipelines to discriminate among shippers would not benefit consumers. It would merely govern the allocation of monopoly profits between the pipeline and its favored shipping affiliates. Were the Commission to do so, we are highly confident that it would impose significant upward pressure on the prices consumers pay for diesel and gasoline throughout the country at the very moment the federal government is taking extraordinary measures to bring those prices down.”
NATSO, SIGMA and NACS support the existing regulatory framework and question the rationale for opening the rulemaking process without determining a prevailing problem and without examining the impact it would have on American consumers.
The Interstate Commerce Act prohibits oil pipelines from discriminating between shippers and requires them to charge “just and reasonable” rates for the transportation of oil through interstate pipelines. Any ability to negotiate individual shipping contracts would create unequal rates and classes of shippers with inequitable pipeline access. This imbalance will result in significantly higher delivery costs.
Cost increases are readily perceived by consumers, who comparison shop fuel prices and often make fuel purchasing decisions based on a one cent per gallon difference. Gasoline prices are one of the most visible, tangible ways consumers experience inflation in the U.S. economy. Higher diesel costs also raise the price of food, medicine and everyday household goods transported by truck as motor carriers experience higher operating costs.
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