When members of the Society of Independent Gasoline Marketers of America gather each fall and spring, meetings of the legislative affairs committee always draw a crowd. The forum covers a broad spectrum of topics - from global warming to renewable fuels to tobacco regulations - and it gives members a chance to learn about government actions that might affect them and an opportunity to weigh in with opinions.
This year was no exception. Members packed a ballroom at SIGMA's spring meeting in San Antonio for a three-hour briefing Friday by outside counsel Tim Columbus. On the agenda:
Automatic Temperature Compensation
A complex and technical issue, which boils down to this: gasoline contracts when the temperature drops; and conversely, expands as temperatures rise, meaning a "warm" gallon of gasoline takes up more space, but holds less energy than a "cold" one. Critics of big oil argue the companies have exploited the discrepancy to rip off consumers. Lawsuits have multiplied and the National Conference of Weights and Measures is considering mandating temperature compensation devices be installed at retail outlets, a proposal Columbus advised SIGMA members to oppose, citing the high cost of retrofitting existing fuel dispensers as pointless. "There's no tangible consumer benefit to installing and operating this equipment," he said. "The retail market takes all of these things into account."
Credit Card Interchange Fees
Banks and credit card companies collect fees from retailers whenever customers use credit cards, typically around two percent of each sale. Citing statistics showing credit card companies make substantially more on the sale of every gallon of gasoline than retailers do, SIGMA has joined a coalition of merchants to retool the charges, or "interchange" fees. "Last year this industry paid banks nearly $8-billion in interchange fees," Columbus said. "It's just a ridiculous situation."
Renewable Fuels
Motor fuel consumption is down, and the mixture of ethanol in gasoline - for use in all but flex fuel vehicles - is currently limited to E-10 blends. Given looming federal regulations mandating increased use of renewable fuels by 2013, lots of talk at the legislative meeting focused on how to break through the so-called "blend wall," an industry term describing the point at which there's either not enough ethanol in the market to satisfy the federal mandate, or not enough vehicles in the market capable of using the higher ethanol blends. "Nobody wants to buy it; nobody wants to pay for it," said Columbus. For SIGMA, the issue is multi-layered. Some independent marketers already offer E-85 blends, and many are considering it. Meanwhile, mid-level ethanol blends could become more prominent with the emergence of RFS mandates. However, retailers face serious liabilities because fuel tanks and dispensing equipment - not to mention the vast majority of cars on the road - are certified to handle only up to E-10.
Highway privatization
The move by some states to boost revenue by privatizing highways is drawing concern among independent gasoline marketers, who fear new tolls will steer drivers away from existing rest stops, toward smaller, less travelled, roads.
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