SourceLine News & Insights

As we begin 2018, there are several regulatory issues that could significantly impact the retail fuel industry. Here’s a look at five of them:

1. Leveraging Tax Reform: Following passage of the 2017 tax law, the corporate tax rate drops from 35% to 21%, and the top individual marginal tax rate drops from 39.6% to 37%. It also preserves a provision for inherited property. Family members who inherit a business acquire the business at its value on the date of the original owner’s death. According to the Petroleum Marketers Association of America, if this provision had been repealed, the family members would have to pay capital gains taxes on the original owner’s gains at time of inheritance.

2. Renewed Efforts for Renewable Fuels?: Renewable Volume Obligations (RVOs) for 2018 will be nearly the same as 2017 (see related story). Although legislation to waive the fuel volatility standards for E15 stalled in 2017, the EPA has indicated it will explore its authority to issue a waiver.

3. Who Covers Costs of Compliance Management?: Almost $528 million in funding reductions are proposed for EPA programs. The funding shortfalls could cause states to absorb costs that the EPA previously shouldered.

4. Fuel Economy In Review: The EPA is reviewing the Corporate Average Fuel Economy standards for cars and light trucks for model years 2022-2025. The existing standards call for more reliance on electric vehicles, but consumer buying has not kept pace with expected demand. Further, some suggest that higher octane fuels could help automakers meet the standards. Updated standards are due April 1.

5. Road Funding: This is expected to become a priority in 2018. A new infrastructure plan calls for $200 billion in federal funding for roadways. However, states and cities may be required to raise a significant share of infrastructure money – up to $1.3 trillion. How will they accomplish this?

To learn more, check out Source’s latest Fuels Market News article, where we reflect on 2017, discuss what the future holds and, in some cases, separate fact from fiction.