Congress is warning gas prices — already on the upswing, these past few weeks — could go even higher, given an Environmental Protection Agency mandate on renewable fuels that's about to take effect.
Refiners are paying much more for corn ethanol credits that are used to meet EPA standards on renewable fuels, Politico reports. Refiners used to pay a few cents per gallon; now, they pay for than $1 a gallon. That means refiners could pay an additional $7 billion before the end of the year — and consumers may end up helping out with costs.
"We're just in the middle of a tornado trying to figure out what to do," said Stephen Brown, vice president for federal and government affairs at the refining company, Tesoro, in the Politico report. "But we can all agree this is not a good thing for consumers."
To counter growing costs, refiners can boost gasoline exports, decrease how much gas they refine — or stick it to buyers.
"I suspect a combination of all three things [are] happening with refiners," said Bill Day, a spokesman for U.S. refiner Valero, in the Politico report.
Meanwhile, congressional energy committee members are looking for solutions. One House Energy and Commerce Committee aide said in the Politico report that members will be holding hearings on the EPA mandate on renewable fuels, but they have yet to set a date.
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