Oil Refiners Cry Foul as ‘RINsanity’ Returns Amid Margin Squeeze
- Price of renewable fuel credits jumped 32 percent in 2 months
- Compliance to cost merchant refiner group $1.8 billion in 2016
This article is for subscribers only.
While oil is mired in a bear market, prices in an obscure corner of the fuel world are only going higher.
Renewable fuel credits surged 32 percent in the past two months, even as oil slumped. This year, U.S. refiners from CVR Refining LP to Valero Energy Corp. will pay $1.8 billion for the credits, known as RINs, adding to the pain of the lowest summer profit margins in five years. The market has gotten so frothy that fuel makers are looking to increase exports to avoid the cost and ethanol lobbyists are calling for an investigation into potential price manipulation.