Tuesday, April 2, 2013

Get Ready for Higher Gas Prices

Get ready to dig a little deeper; via Heritage:
The EPA’s new Tier 3 regulations require a reduction in the amount of sulfur in gasoline to an average of 10 parts per million (ppm) by January 2017, down 70 percent from the current average of 30ppm today. The new regulation is similar to those standards of California, Japan, and South Korea. 
A study commissioned by the American Petroleum Institute found that reducing sulfur to 10ppm will increase gas prices 6 cents to 9 cents per gallon—although the study does not specifically analyze the newly proposed EPA regulation. The analysis also mentions that if the EPA proposes an additional vapor reduction regulation, that cost increase will skyrocket to 25 cents per gallon.
The environmental impact is expected to be negligible.

The best part:
Because refineries operate on such thin margins already, implementation of these regulations could result in a number of refinery closures. Such closures could squeeze supply chains and further increase the price of gas.
EPA unhinged.  Just in time for summer.

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