Road fuels
Overview
Fuels for road transportation continue to drive the refining industry. But gasoline and diesel are coming under increasing pressure from low-carbon targets being implemented around the world.
Global oversupply, new regulatory measures and rapidly increasing competition for export markets are affecting refining margins. The need for accurate insight and data is more critical than ever.
Argus road fuels coverage includes price assessments and key insights into both conventional fuels - gasoline, distillates and blending components – as well as biofuels, in each key region. Our trusted prices are delivered alongside the latest market-moving news, in-depth analysis, supply and demand dynamics, price forecasts and forward curves data.
Latest road fuels news
Browse the latest market moving news on the global road fuels industry.
Tax credit delay risks growth of low-CO2 fuels
Tax credit delay risks growth of low-CO2 fuels
New York, 15 October (Argus) — A new US tax credit for low-carbon fuels will likely begin next year without final guidance on how to qualify, leaving refiners, feedstock suppliers, and fuel buyers in a holding pattern. The US Treasury Department this month pledged to finalize guidance around some Inflation Reduction Act tax credits before President Joe Biden leaves office but conspicuously omitted the climate law's "45Z" incentive for clean fuels from its list of priorities. Kicking off in January and lasting through 2027, the credit requires road and aviation fuels to meet an initial carbon intensity threshold and then ups the subsidy as the fuel's emissions fall. The transition to 45Z was always expected to reshape biofuel markets, shifting benefits from blenders to producers and encouraging the use of lower-carbon waste feedstocks, like used cooking oil. And the biofuels industry is used to uncertainty, including lapsed tax credits and retroactive blend mandates. But some in the market say this time is unique, in part because of how different the 45Z credit will be from prior federal incentives. While the credit currently in effect offers $1/USG across the board for biomass-based diesel, for example, it is unclear how much of a credit a gallon of fuel would earn next year since factors like greenhouse gas emissions for various farm practices, feedstocks, and production pathways are now part of the administration's calculations. This delay in issuing guidance has ground to a halt talks around first quarter contracts, which are often hashed out months in advance. Renewable Biofuels chief executive Mike Reed told Argus that his company's Port Neches, Texas, facility — the largest biodiesel plant in the US with a capacity of 180mn USG/yr — has not signed any fuel offtake contracts past the end of the year or any feedstock contracts past November and will idle early next year absent supportive policy signals. Biodiesel traders elsewhere have reported similar challenges. Across the supply chain, the lack of clarity has made it hard to invest. While Biden officials have stressed that domestic agriculture has a role to play in addressing climate change, farmers and oilseed processors have little sense of what "climate-smart" farm practices Treasury will reward. Feedstock deals could slow as early as December, market participants say, because of the risk of shipments arriving late. Slowing alt fuel growth Recent growth in US alternative fuel production could lose momentum because of the delayed guidance. The Energy Information Administration last forecast that the US would produce 230,000 b/d of renewable diesel in 2025, up from 2024 but still 22pc below the agency's initial outlook in January. The agency also sees US biodiesel production falling next year to 103,000 b/d, its lowest level since 2016. The lack of guidance is "going to begin raising the price of fuel simply because it is resulting in fewer gallons of biofuel available," said David Fialkov, executive vice president of government affairs for the National Association of Truck Stop Operators. And if policy uncertainty is already hurting established fuels like biodiesel and renewable diesel, impacts on more speculative but lower-carbon pathways — such as synthetic SAF produced from clean hydrogen — are potentially substantial. An Argus database of SAF refineries sees 810mn USG/yr of announced US SAF production by 2030 from more advanced pathways like gas-to-liquids and power-to-liquids, though the viability of those plants will hinge on policy. The delay in getting guidance is "challenging because it's postponing investment decisions, and that ties up money and ultimately results in people perhaps looking elsewhere," said Jonathan Lewis, director of transportation decarbonization at the climate think-tank Clean Air Task Force. Tough process, ample delays Regulators have a difficult balancing act, needing to write rules that are simultaneously detailed, legally durable, and broadly acceptable to the diverse interests that back clean fuel incentives — an unsteady coalition of refiners, agribusinesses, fuel buyers like airlines, and some environmental groups. But Biden officials also have reason to act quickly, given the threat next year of Republicans repealing the Inflation Reduction Act or presidential nominee Donald Trump using the power of federal agencies to limit the law's reach. US agriculture secretary Tom Vilsack expressed confidence last month that his agency will release a regulation quantifying the climate benefits of certain agricultural practices before Biden leaves office , which would then inform Treasury's efforts. Treasury officials also said this month they are still "actively" working on issuing guidance around 45Z. If Treasury manages to issue guidance, even retroactively, that meets the many different goals, there could be more support for Congress to extend the credit. The fact that 45Z expires after 2027 is otherwise seen as a barrier to meeting US climate goals and scaling up clean fuel production . But rushing forward with half-formed policy guidance can itself create more problems later. "Moving quickly toward a policy that sends the wrong signals is going to ultimately be more damaging for the viability of this industry than getting something out the door that needs to be fixed," said the Clean Air Task Force's Lewis. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Tidewater terminal adds biodiesel blending
Tidewater terminal adds biodiesel blending
New York, 15 October (Argus) — US commodity transportation company Tidewater will soon be able to blend over 2mn USG of biodiesel per month at one of its terminals in Washington state, enabling broader use of renewable fuels in the region. The company said the new biofuel facility at its Snake River Terminal in Pasco, Washington, will be operational "by the end of this week." The addition to the terminal will also allow for loading neat biodiesel for distribution to other blending sites in eastern Washington and in nearby Oregon. The terminal can store 9mn USG of petroleum and renewable diesel that can now be blended with up to 20pc biodiesel depending on customer requests, Tidewater said. The US Department of Agriculture helped fund the project through a $3.1mn grant last year as part of the agency's Higher Blends Infrastructure Incentive Program. The office of senator Maria Cantwell (D-Washington), which supported the funding request, said at the time that the plan was to make more renewable fuels available to farmers, local gas stations, and potentially to BNSF Railway. Crucially, Washington is one of just three states in the US with a low-carbon fuel standard program, which requires yearly reductions in transportation fuel carbon intensity and helps subsidize biofuel production. Higher-carbon fuels exceeding the annual limit incur deficits that suppliers must offset with credits generated from the distribution of approved lower-carbon alternatives, including fuels like biodiesel and renewable diesel. Oregon has a similar program. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
California passes minimum gasoline reserve bill
California passes minimum gasoline reserve bill
Houston, 14 October (Argus) — California governor Gavin Newsom (D) on Monday signed AB X2-1 into law, authorizing the state's energy regulator to require refiners to maintain minimum gasoline inventories. The bill is the latest in a multi-year legislative effort by Newsom to mitigate price spikes at the pump and authorizes the California Energy Commission (CEC) to regulate, develop and impose requirements for in-state refiners to maintain minimum stocks of gasoline and gasoline blending components. The CEC would have the authority to penalize refiners who fail to comply. A minimum road fuels inventory requirement is unprecedented in the US but has been implemented in various forms in Australia, New Zealand, the Philippines and Mexico. While the bill was signed into law Monday, no mandate on refiners is imminent as the CEC will now begin the process of assessing how to structure and implement a minimum reserve rule. Industry group Western States Petroleum Association (WSPA) that has long opposed Newsom's regulation of the oil and gas industry called AB X2-1 a "smokescreen" for impending higher gasoline taxes in California and have previously deemed the minimum stock requirement a misdiagnosis of a broader problem. "You couldn't pay me enough to regurgitate the talking points of WSPA," Newsom said in a press conference today and referred to the industry group and the oil industry at large as the "polluted heart of the climate crisis". By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
High inventories dampen German heating oil demand
High inventories dampen German heating oil demand
Hamburg, 14 October (Argus) — Demand for heating oil in Germany fell last week as a result of high consumer stocks, contrary to sellers' expectations of continued buying. Private heating oil tanks were on average 61pc full on 10 October, an increase of almost two percentage points from the same time in 2023 and more than three percentage points from 2022, data from Argus MDX show. Consumers have in recent weeks been taking advantage of lower distillate prices to stock up on heating oil ahead of winter. Heating oil prices in September reached their lowest since June 2023. Although there was a sharp rise in prices at the start of October, sellers experienced another surge in demand. This was driven by consumers buying because of escalating tensions in the Middle East and a subsequent jump in Ice gasoil futures. But demand for heating oil fell significantly in the middle of last week, largely because consumers had stocked up sufficiently and no longer felt the need to buy at a premium. A logistical bottleneck for deliveries further reduced demand. Demand for imported diesel is also decreasing. An economic slowdown in Germany continues to suppress diesel demand. This trend could continue until at least the end of the year, federal government data show. Operators are able to run barges at full capacity. This, coupled with overall low demand, is leading to a fall in freight costs from the Amsterdam-Rotterdam-Antwerp (ARA) hub into Germany. There is increased domestic supply in western Germany. A major supplier at Shell's 334,000 b/d Rhineland refinery resumed spot sales of heating oil and diesel last week, having halted them because of an unplanned unit shutdown. By Natalie Mueller Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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