U.S. oil refiners say biofuel blending requirements will cost them the highest amount of money they’ve spent since 2018.
The refiners say it’s putting more pressure on margins already hit by the collapse in oil prices and demand which began in March.
The Financial Post says COVID-19 has led to less blending activity and as a result, fewer Renewable Identification Numbers being issued. With fewer of the compliance credits available, the price of RINs has gone up as well.
As of earlier this week, the price for corn-based ethanol fuel credits in 2020 has risen almost fivefold this year to 43.50 cents each.
An oil industry executive says RINs are one more cost to contend with in a refining environment which is seeing margins under pressure because of so much excess refining capacity around the world.
The higher cost of RINs combined with lower margins due to COVID-19 have added urgency to the refiners’ side of the debate in Washington, D.C., around blending requirements.
Lawmakers from oil-producing states have called for relief for refiners during COVID-19, due in part to the increased RIN prices.
