US states slash fuel taxes after spike in prices
California is considering a proposal to give residents a refund of $400 per vehicle in response to record-high fuel prices, while Maryland and Georgia last week temporarily suspended state taxes on fuel purchased in those states.
California governor Gavin Newsom (D) today unveiled more details on a proposed $11bn fuel price relief package, which would need support from the state's Democratic-controlled legislature to be signed into law. Out of the plan, $9bn would go to residents in debit cards with $400 for each registered vehicle, up to two vehicles, with payments starting as soon as July.
"That direct relief will address the issue that we all are struggling to address, and that is the issue of gas prices," Newsom said.
Governors across the US have started tapping surplus state funds to provide drivers relief from gasoline prices that for regular grade hit a record national weekly high of $4.32/USG earlier this month, according to data from the US Energy Information Administration (EIA). Fuel prices have surged in response to the Russia-Ukraine conflict and corresponding sanctions.
Maryland governor Larry Hogan (R) signed emergency legislation on 18 March that will suspend for 30 days the state's 36.1¢/USG tax on gasoline and 36.9¢/USG tax on diesel. Georgia governor Brian Kemp (R) the same day suspended his state's 29.1¢/USG tax on gasoline and 32.6¢/USG tax on diesel through 31 May.
For the California relief package, it would include up to $600mn to pause part of the state's sales taxes on diesel for a year and $523mn to pause inflationary increases to state taxes on gasoline and diesel. It would also have $750mn in grants for public transit agencies to offer three months of free public transit. Californians paid $5.71/USG for regular grade gasoline in the week ending 21 March, according to EIA data
Some Democratic lawmakers in the US Congress have proposed suspending the federal 18.4¢/USG tax on gasoline for the rest of the year. But critics say lifting fuel taxes will eat into needed funding for road work and stimulate the economy at a time when inflation is already at 40-year highs. Much of the benefits of a fuel tax holiday will flow to oil producers in the form of higher prices from higher demand, non-profit group Committee for a Responsible Federal Budget president Maya MacGuineas said last month.
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Brazil narrows lower biofuel mix mandate in south
Brazil narrows lower biofuel mix mandate in south
Sao Paulo, 10 May (Argus) — Brazil's oil regulator ANP dialed back the reduced biofuels mandatory blend in Rio Grande do Sul state to four cities amid the recent flooding in the region. Low blending areas now apply only to the cities of Canoas, Esteio, Rio Grande and Santa Maria. The measure will still last for 30 days, starting on 4 May. ANP lowered the anhydrous ethanol blend on gasoline to 21pc from the current 27pc in the entire state earlier this week , while pushing the mandatory biodiesel mix for 10ppm (S10) diesel down to 2pc, from the usual 14pc. The agency also temporarily suspended the blending mandate for diesel with 500ppm of sulfur (S500). ANP said it decreased the exemption's coverage as it identified "that the supply situation in the rest of the state had stabilized." Rainfall in Rio Grande do Sul blocked railways and highways where biofuels are transported to retail hubs. Floods in the state have left at least 116 dead and 143 missing, according to the local government. By Laura Guedes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Mexican power outages enter fourth day
Mexican power outages enter fourth day
Mexico City, 10 May (Argus) — Mexican power grid operator Cenace issued its fourth consecutive day of operating alerts amid the heatwave gripping the country. Net electricity demand reached 47,321MW early today, with deployed electricity capacity slightly below at 47,233 MW, according to Cenace. Since 7 May, Cenace has declared emergency operating alerts as demand exceeded generation capacity during peak evening hours, prompting the grid operator to preemptively cut electricity supply across different states to maintain grid integrity. Power outages have lasted up to several hours in Mexico City and in major industrial states as power demand has outstripped supply by up to 1,000MW. Peak demand this week hit 49,000MW, just below last year's historic peak of 53,000MW during atypical temperatures in June. "We are very concerned about the unprecedented outages detected across 21 states, a situation that affects the normal functioning of Mexican companies," national business chamber Coparmex said. Peak electricity demand typically rises in June-July but temperatures this week have risen as high as 48°C (118° F) across some states. Mexico City reported a record high of 34.3°C on 9 May and high temperatures are forecast to continue into next week, Mexico's national weather service said. The inability of Mexico's grid to respond to increased demand is because of insufficient power generation capacity, non-profit think-tank the Mexican institute for competitiveness (Imco) said this week. "Despite the energy ministry's forecast that 22,000MW of new power capacity would enter service by 2026, only 1,483MW had entered service as of 2022" since late 2018, Imco said. President Andres Manuel Lopez Obrador's administration pledged to build new generation capacity, including five gas-fired, combined-cycle plants, but recognized this week that delays had contributed to the power outages. "We have an electricity generation deficit because some of the combined-cycle plants were delayed, but we are working on it and it will soon be resolved," Lopez Obrador said on 9 May. Lopez Obrador's government has also curtailed private sector power development during his administration. Mexico needs to upgrade and expand its transmission network, industry associations say. "In order to resolve this problem, we believe that a reopening of the electricity market to the private sector is imperative," Mexico's wind energy association, Amdee, said. Mexico has 87,130MW of installed capacity, with 39.5pc from combined-cycle gas-fired power plants and 31pc in renewable power, including wind, solar, hydroelectric, geothermal and biomass, according to the latest statistics from the energy ministry. By Rebecca Conan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil reports more off-spec biodiesel March-April
Brazil reports more off-spec biodiesel March-April
Sao Paulo, 10 May (Argus) — The rate of Brazilian biodiesel falling below required blending limits nearly tripled in March and April after the mandate was increased to 14pc, according to a government analysis. Hydrocarbons regulator ANP's Fuel Quality Monitoring Program (PMQC) found 271 instances of biodiesel below the required level between 1 March — when the blending mandate was increased from 12pc to 14pc — and 30 April. In January and February the PMQC found 97 instances of blends that did not meet the 12pc level. An increase in missed blending targets is common during transitions to higher blending levels, according to the agency, mainly due to difficulties in depleting inventories of the lower-level blend. Several plants claim that a slowdown in biodiesel withdrawals in the first four months of the year also contributed to challenges in complying with the new blending level. Some retailers' loss of market share has also been cited as an aggravating factor. In March, 154 recorded instances of non-compliance covered blending levels between 12.3pc and 13.9pc, according to ANP data. In April, there were 101 occurrences within the 12.3pc and 13.9pc range. Another eight instances of non-compliance were also recorded in each of March and April. The PMQC is a monitoring program and does not have the same effect on market behavior as inspections, according to ANP. "It is used as one of the intelligence vectors for the planning of ANP's inspection actions," the agency said. Only irregularities identified in the context of inspectios can result in fines levied against fuel distributors. By Alexandre Melo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Russia leads Opec+ output fall
Russia leads Opec+ output fall
London, 10 May (Argus) — Opec+ crude output by members subject to cuts fell by 440,000 b/d in April as Russia began implementing a fresh cut and Iraq and Kazakhstan curbed some of their overproduction. This saw the group's production fall to 34.11mn b/d, which was 140,000 b/d above quota, Argus estimates. Still, this was a marked improvement on the 230,000 b/d overproduction that it recorded in March. The lower production has not provided much support to oil prices, which have shed $5-8/bl in the past month. Several members of the alliance are implementing a new set of "voluntary" cuts that came into effect in January and, for now, run to the end of June. What Opec+ decides to do beyond this will probably be decided at a ministerial meeting in Vienna on 1 June, although the likelihood of a rollover has grown as oil prices have fallen. The big mover last month was Russia, whose output fell by 210,000 b/d to 9.29mn b/d. The drop is related to Russia's pledge to start phasing out an existing 500,000 b/d export cut commitment from April and replace it with a 471,000 b/d production cut by June. But the country remained 190,000 b/d above its new 9.1mn b/d target for April. And while the output fall shows Russia has made headway with its pledge to reduce production, sanctions on the country's oil industry and Ukrainian attacks on its refineries could affect its crude output in the months ahead. Iraq and Kazakhstan also reduced their output last month, while remaining well above target. Iraqi output fell by 40,000 b/d to 4.14mn b/d, mostly owing to lower crude use by the power sector. But this was still around 140,000 b/d above its target of 4mn b/d. Kazakhstan's output fell by 40,000 b/d to 1.54mn b/d — the second month in a row that its output has fallen. But it was also still around 70,000 b/d above its target of 1.47mn b/d. Compensation plans Iraq and Kazakhstan have each submitted plans to the Opec+ Joint Ministerial Monitoring Committee detailing how they intend to compensate for producing above target in the first four months of the year. As things stand, Iraq says it will produce 50,000 b/d below quota in May-September, 100,000 b/d below quota in October-November and 152,000 b/d below quota in December. Kazakhstan's compensation plan starts in May with an initial cut of 18,000 b/d below target. It would then stick to its target in June and July before implementing a cut of 131,000 b/d in August, no cut in September, 299,000 b/d in October, 40,000 b/d in November and no cut again in December. The two countries' plans are dependent on a final production figure for April from secondary sources — including Argus — and could be adjusted after it becomes available. Nigerian production recorded a large fall in April, dropping by 100,000 b/d to 1.4mn b/d, the lowest since 1.28mn b/d in August 2023. This left the country 100,000 b/d below its target of 1.5mn b/d. Production was relatively uneventful in the Mideast Gulf Opec+ contingent. Saudi Arabia's output fell by 30,000 b/d to 8.97mn b/d, the UAE's fell by 20,000 b/d to 2.93mn b/d, Kuwait's dropped by 20,000 b/d, while Bahrain's production increased by 30,000 b/d to 190,000 b/d. All four members were more or less within their targets. Iran, which like Libya and Venezuela is not bound by production targets, boosted its output by another 20,000 b/d to 3.3mn b/d — the highest since October 2018. The gains have come despite US sanctions and Washington's attempts to crack down on the country's oil trade. Opec+ crude production mn b/d Apr Mar* Apr target† ± target Opec 9 21.32 21.54 21.22 0.10 Non-Opec 9 12.79 13.01 12.75 0.04 Total Opec 18 34.11 34.55 33.97 0.14 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Apr Mar* Apr target† ± target Saudi Arabia 8.97 9.00 8.98 -0.01 Iraq 4.14 4.18 4.00 0.14 Kuwait 2.41 2.43 2.41 -0.00 UAE 2.93 2.95 2.91 0.02 Algeria 0.91 0.92 0.91 0.00 Nigeria 1.40 1.50 1.50 -0.10 Congo (Brazzaville) 0.28 0.25 0.28 0.00 Gabon 0.23 0.25 0.17 0.06 Equatorial Guinea 0.05 0.06 0.07 -0.02 Opec 9 21.32 21.54 21.22 0.10 Iran 3.30 3.28 na na Libya 1.22 1.18 na na Venezuela 0.82 0.85 na na Total Opec 12‡ 26.66 26.85 na na *revised †includes additional cuts where applicable ‡Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Apr Mar* Apr target† ± target Russia 9.29 9.50 9.10 0.19 Oman 0.76 0.76 0.76 0.00 Azerbaijan 0.48 0.48 0.55 -0.07 Kazakhstan 1.54 1.58 1.47 0.07 Malaysia 0.35 0.35 0.40 -0.05 Bahrain 0.19 0.16 0.20 -0.01 Brunei 0.08 0.08 0.08 -0.00 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.08 0.08 0.12 -0.04 Total non-Opec† 12.79 13.01 12.75 0.04 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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