Washington Insider
What are lawmakers doing about the cost of fuel?
Mandatory fuel surcharge proposal stays alive, faces scrutiny

On July 19, the House Transportation and Infrastructure (T&I) Committee gave unanimous approval to HR4441, the Motor Carrier Fuel Cost Equity Act of 2000. Between its original introduction and the T&I Committee vote, the legislation has undergone various changes to address the concerns of both proponents and opponents of the bill; without losing sight of the main purpose of the legislation - that a fuel surcharge be imposed on shipments and that 100 percent of the surcharge gets to the person responsible for paying for the fuel.The next step in the legislative process is a floor vote by the full House and then the Senate.With Congress' traditional summer recess beginning at the end of July, time is running short for Congress to pass this legislation. When Congress comes back in the first week of September, it will only have a few weeks on its schedule before its members go home to campaign for the election on Nov. 7. Momentum for the fuel surcharge bill must be kept up by constituent contact to elected officials to give it its best shot at passage. Supporters of the bill are working hard to try and get the bill passed before we see potentially higher fuel prices this fall and winter.

As gasoline prices rise, so does interest in suspending the federal fuel tax

Despite the fact that diesel prices have remained at a national average of around $1.42 for more than two months, it has taken a spike in gasoline prices to re-ignite congressional interest in addressing high fuel prices.Those who watched speeches of the House of Representatives and the Senate in late June on C-SPAN might have thought that they were watching reruns from February and March. Criticism was hurled at the Clinton administration for not having an energy policy, calls were made for the release of the strategic oil reserve and calls were made for the creation of new oil reserves.New legislation was introduced into the Senate that would provide a temporary roll back of the federal fuel tax. The bill S2808 was introduced on June 28 by Senators Spencer Abraham (R-MI), Kay Bailey Hutchison (R-TX), Rod Grams (R-MN), and Fitzgerald (R-IL). It would suspend the 18.4 cents per gallon federal gas tax and 24.4 cents per gallon federal tax on diesel fuel for 150 days.

A similar bill introduced this past spring by Majority Leader Trent Lott did not generate enough support for its passage. The sponsors of S2808 believe that with gasoline prices at an all time high there will be broader support for a temporary fuel tax repeal.In the House of Representatives, Rep. Roy Blunt (R-MO) is calling for a 90-day suspension of 18.4 cents of gasoline and diesel fuel taxes. The revenue from these fuel taxes is dedicated to the highway trust fund, and so the prime critics of these fuel tax proposals are those elected officials who oversee the spending priorities of the highway trust fund. Rep. Blunt answered these critics by proposing to reimburse from the budget surplus the estimated $8 billion in revenues that would be lost during the three month fuel tax repeal. The Office of Management and Budget has projected a budget surplus this year of $211 billion.

With elections coming up in November, the proposals for a fuel tax repeal will most likely remain a popular issue as long as fuel prices stay high.

EPA proposes new sulfur standards for diesel fuel

Seemingly unconcerned with already high diesel fuel prices, the Environmental Protection Agency (EPA) proposed new standards to lower the sulfur content of diesel fuel. The rule proposes that highway diesel fuel sulfur content be reduced from the current level of 500 parts per million (ppm) maximum to a 15 ppm maximum in the year 2006.Critics of the proposal believe that these new standards could raise the price of fuel by more than twelve cents per gallon. This cost increase would come from increased production costs, from the costs of retooling refineries to produce compliant fuel, and from possible fuel shortages as oil companies struggle to meet the demand before enough refineries are ready to produce the compliant diesel formula.OOIDA has lent its support to a coalition assembled by the American Petroleum Institute (API) to object to these new proposals. According to the API, if the EPA were to revise its proposal for a maximum sulfur level of 50 ppm, a 90 percent reduction in the sulfur content of diesel, this goal could be achieved at half the cost of the current proposal.The public is invited to submit written comments on the proposal to the EPA by Aug. 14, 2000.